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What is the relation of accounts payable and accounts receivable?
Started by accounting lads
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3 Replies
Posted: 6 d
Accounts payable (AP) means the amount that a firm owes to suppliers of products or services rendered to it and accounts receivable (AR) is the amount being owed by customers to the business welcomed by delivering products or services. Basicly, AP is an asset and AR an asset. It is essential to maintain the two as a form of healthy cash flow. AP is about paying the bills at the right time so as to have a relationship with its vendors, AR is about collecting the money you owed by the clients at the right time so as to have funds to run its operations and develop. The two are all important components of the accounting cycle. accounts payable vs accounts receivable
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