ACCOUNT PAYABLES & ACCOUNT RECEIVABLES ---- DIFFERENCE

Account payables are an amount a company owes to others because of purchase of any goods or services on credit . It is a liability to pay to another one.

Where as  Account Receivable is a current Asset to get the amount from another person. Only credit transaction  can create Account Payable and Account Receivable.

Normally when any goods purchased from any person on credit, then in the books of accounts of purchaser, treat this transaction as Account Payable because there is a liability to make payment to the supplier. Likewise the books of accounts of seller treat this transaction as Account receivable because  is is a receivable amount from purchased.

For Example :- A sells some goods to B  for AED 10,000/- Here B is the purchaser and A is the seller  and ‘’B’’ responsibility is to make payment to ‘’A’’ so  in the books of ‘’B’’ this transaction treated as                        ’’ Account Payables ‘’. And in this transaction, ‘’A’’ is the seller and ‘’A’’ required to get AED 10,000/- from ‘’A’’ so in the books of ‘’A’’ , this transaction treated as Account Receivables