Accounts payable are amounts due to vendors or suppliers for goods or services received that have not yet been paid for. The sum of all outstanding amounts owed to vendors is shown as the accounts payable balance on the company\'s balance sheet. PDF

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Summary

Accounts payable are amounts due to vendors or suppliers for goods or services received that have not yet been paid for. The sum of all outstanding amounts owed to vendors is shown as the accounts payable balance on the company's balance sheet....

Description

Accounts Payable -

These are actually trade payables that came from the ordinary course of business operations. E.g. if you bought merchandise inventories to produce finished goods, or in case of merchandising business, to be sold in the ordinary course of business. If you have not paid cash or issued a note in the transaction it will be called an open account These open accounts result to accounts payable

Notes Payable Notes Payable 1. Short- term Notes Payable 2. Long-term interestbearing notes payable bearing a realistic rate NR = ER 3. Long-term interestbearing note NOT bearing a realistic note NR≠ ER 4. Long-term non-interestbearing notes payable NR=0 ER≠0

Initial Measurement Face Value

Subsequent Measurement Face Value

Interest Paid

Interest Expense

Face x Nominal Rate Face x Nominal Rate

Face x Nominal Rate Face x Nominal Rate

Face Value

Face Value

1. Cash price equivalent 2. Present value of the note

Amortized Cost

Face amount x Nominal rate

CA, Beg x Effective interest rate

1. Cash price equivalent 2. Present value

Amortized Cost

Face x Nominal rate

CA, Beg x Effective Rate...