What is an accounts payable?

Accounts payable refers to the liabilities a business incurs when it purchases goods or services on credit. This means it represents an amount of money that the company owes to suppliers or creditors for products or services that have been acquired but not yet paid for. Essentially, it reflects the company's obligation to settle these debts in the future.

This term is crucial for understanding a company's short-term financial health, as it indicates how much is owed to others and influences cash flow management. In accounting, accounts payable is recorded as a liability on the balance sheet, typically categorized under current liabilities since these debts are generally expected to be settled within a year.

The other options describe different financial aspects: money received from clients is about income, revenue indicates the earnings from services provided, and assets are resources owned by the company. None of these pertain to the concept of accounts payable, which is specifically about outstanding payments to creditors.