Accounts Payable Management (AP Services) involves the oversight of all financia

Question

Accounts Payable Management (AP Services) involves the oversight of all financial activities relating to creditors (people you owe money to). All related transactions are recorded in the Accounts Payable sub-ledger at the time of invoice and displayed as liabilities on your company's balance sheet Accounts Receivable Management (AR Services) involves the oversight of all financial activities relating to debtors (people who owe you money). All transactions related to accounts receivable are recorded in the Accounts Receivable sub-ledger upon creation of invoice and displayed as assets on your company's balance sheet A/P or AP. A/R or AR. Paid to whom? Accounts payable are amounts a company owes because it purchased goods or services on credit from a supplier or vendor. Accounts receivable are amounts a company has a right to collect because it sold goods or services on credit to a customer.

Explanation / Answer

Accounts payable is the amount of credit purchase. The name of creditors bearing with all sorts of credit purchase, cash payments to them, discounts receive, and balances are there in the sub-ledger. The ending balance of the aggregate of sub-ledger is the current liability of the company, which is shown in the balance sheet as accounts payable.

Accounts receivable is the amount of credit sale. The name of debtors bearing with all sorts of credit sale, cash receives from them, discounts allowed, and balances are there in the sub-ledger. The ending balance of the aggregate of sub-ledger is the current asset of the company, which is shown in the balance sheet as accounts receivable.

The amount of accounts payable (ending balance) is paid to creditors. The amount of accounts receivable (ending balance) is received from debtors.

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