What are accounts payable?

Accounts payable is the account a company uses to show money owed by them to another that will be paid off in 12 months or LESS. For example, if a company buys a computer for $3,000 on account and will be paying the computer off in 12 months or less, the transaction is recorded as an Account Payable.

*remember, this is for accounts that will be paid off in 12 months or less, anything longer, such as 13 months must be recorded as a Note Payable.

In other words...

Accounts payable is money that a business owes.