What is the difference between accounts payable and accounts receivable?

In short, accounts payable is the money you owe, whereas accounts receivable is the money others owe you. We’ve prepared an in-depth guide to compare accounts payable vs. accounts receivable to help you gain a better understanding of these two bookkeeping basics. Accounts payable (AP): The money a company owes to vendors and suppliers.

What is an example of accounts payable?

One common example of accounts payable are purchases made for goods or services from other companies. Depending on the terms for repayment, the amounts are typically due immediately or within a short period of time. What are Accounts Receivable? Accounts receivable is a current asset account that keeps track of money that third parties owe to you.

What is accounts receivable in accounting?

Accounts receivable is the other end of the accounting spectrum. Accounts receivable (AR) represents the money owed to a company for sales made on credit. Accounts receivable is part of the business life cycle between the delivery of goods or services and the payment for those by customers.