What Are Accounts Payable (AP)?

Accounts Payable is an accounting term that represents a company's short-term debt. It is found under Current Liabilities on a Balance Sheet and Operating Activities on the Cash Flow Statement.

Accounts Payable can be thought of as an IOU and is typically used when the firm has received a service or product (i.e. parts order, management consultation etc) but has not yet paid for it.

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Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.

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