Accounts payable are the amounts a business owes to suppliers or creditors for goods or services purchased on credit.

It arises when:

A company buys goods or services

Payment is not made immediately

The amount is due within a short period

Accounts payable are shown as a current liability in the balance sheet.

Example:
If a business purchases goods worth ₹50,000 on credit, the amount becomes accounts payable until it is paid.

In simple terms, accounts payable means money the business has to pay to others for credit purchases.