Want to know about account payable & account receivable

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Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2013 Dear Sir,
I am swapnil here. I want to know concept of Account payable & Account Receivable & the process of account payable & Account receivable

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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22 August 2013 Accounts payable consists of the vendor bills verification, posting, payment and vendor reconciliation and processing all other payments like tax, advance etc.

Accounts receivable is the invoice raising, checking and accounting the same. follow up the collections and passing receipt entries and customer accounts reconciliations. and take care about any other receipt like interest etc

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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07 September 2013 Definition of 'Accounts Payable - AP'
An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable entry is found on a balance sheet under the heading current liabilities.

Accounts payable are often referred to as "payables".

Another common usage of AP refers to a business department or division that is responsible for making payments owed by the company to suppliers and other creditors.

'Accounts Payable - AP'
Accounts payable are debts that must be paid off within a given period of time in order to avoid default. For example, at the corporate level, AP refers to short-term debt payments to suppliers and banks.

Payables are not limited to corporations. At the household level, people are also subject to bill payment for goods or services provided to them by creditors. For example, the phone company, the gas company and the cable company are types of creditors. Each one of these creditors provide a service first and then bills the customer after the fact. The payable is essentially a short-term IOU from a customer to the creditor.

Each demands payment for goods or services rendered and must be paid accordingly. If people or companies don't pay their bills, they are considered to be in default.

account receivable
Any amount owed to a business as the result of a purchase of goods or services from it on a credit basis. Although the firm making the sale receives no written promise of payment, it enters the amount due as a current asset in its books. Accounts receivable constitute a major portion of the assets of many companies, and they may even be sold or pledged as collateral to obtain loans. See also account payable; factoring.

Accounts Receivable is an account containing all amounts owing to us. It is all the amounts we expect to receive. In other words, our debtors.

Account Payable Vs. Account Receivable
Accounts Payable is an account containing all amounts that we owe to others. It is all the amounts we expect to pay in the future. In other words, our creditors.

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