Dating office supplies
When the bill is paid, the department enters a credit in its accounts payable column.
To balance these entries, the accountant must enter a debit in the relevant category, office supplies in this case, when the debt is incurred, and he must enter a credit in the cash column when he pays the invoice. Other short-term business debts include expenses such as payroll costs, business income taxes and short-term loans.
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For example, at the corporate level, AP refers to short-term debt payments to suppliers.
The payable is essentially a short-term IOU from the business to the other business, who acts as a creditor.