The following table specifies the differences between the “accounts payable (AP)” and “accounts receivable (AR):
Accounts Payable | Accounts Receivable |
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The term Accounts Payable specifies the amount a company owes because it has purchased goods or services on credit from a vendor or supplier. | The term Accounts Receivable amount a company has the right to receive because it has sold goods or services on credit to the customer. |
Accounts payable is a form of liability. | Accounts receivable is a form of asset. |