Also referred to as "payables," this is the accounting term used to describe balances owed to trade partners for materials, supplies, goods and services that were purchased on credit. Accounts payable recognizes the timing difference between the company's receipt of the benefit or asset, and the payment for this expense.
Accounts payable is recorded on the balance sheet as a current liability. As such repayment of this debt is expected in less than 12 months. The normal repayment terms to creditors such as trade partners are 30 to 60 days.