Accounts payable results from transactions in which merchandise is purchased but no formal note is signed to show the purchaser's liability to the seller.

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Accounts payable represent the amount owed to the seller for merchandise purchased on credit, without the need for a formal promissory note or contract. The liability is usually established through an invoice or purchase order, which specifies the terms of payment and the due date for settlement. In general, accounts payable reflect a short-term obligation that must be recorded accurately and paid promptly to maintain good relations with suppliers and optimize cash flow management.

Accounts Payable Results from Transactions in Which Merchandise Is Purchased