In the world of finance, there are several terms that are commonly used, and one of them is account payable. This term is used extensively in business and accounting, and it is essential to understand its definition and meaning.
Definitions
Account payable refers to the amount of money that a company owes to its suppliers or vendors for the goods or services that they have provided. It is a liability that a company has to pay within a specific time frame. In simpler terms, account payable is the money that a company owes to others.
Origin
The origin of the term account payable can be traced back to the 14th century. It comes from the Old French word ‘paiable,’ which means ‘payable.’ The word ‘account’ comes from the Latin word ‘computare,’ which means ‘to calculate.’.
Meaning in different dictionaries
According to the Oxford Dictionary, account payable is defined as “a debt owed by a company to its creditors.” The Merriam-Webster Dictionary defines it as “an amount owed to a creditor on an open account.”
Associations
Account payable is closely associated with the concept of credit. When a company buys goods or services on credit, it incurs an account payable. It is also associated with the concept of working capital, as account payable is a part of a company’s current liabilities.
Synonyms
Some of the synonyms of account payable include debt, liability, obligation, and invoice.
Antonyms
The antonyms of account payable include account receivable, asset, and income.
The same root words
Some of the words that share the same root as account payable include accountant, accounting, and accountability.
Example Sentences
- The company has a significant account payable to its suppliers.
- The account payable will be paid within 30 days.
- The finance department is responsible for managing the account payable.
- The account payable has increased due to the company’s expansion.
- The auditors will review the account payable as part of their audit process.