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What is accounts receivable and accounts payable?

Beginner

Answer

Accounts receivable (trade debtors) is money owed to the business by credit customers—an asset in the sales ledger. Accounts payable (trade creditors) is money the business owes to credit suppliers—a liability in the purchases ledger. They arise from buying and selling on credit.
Real-world example Unpaid customer invoices are receivables; unpaid supplier invoices are payables.

Common follow-ups: Which is an asset? | Where is each recorded?