ACCOUNTS PAYABLE Definition

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ACCOUNTS PAYABLE (AP) are trade accounts of businesses representing obligations to pay for goods and service received.

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PROVISION, generally, is to prepare in advance for an event that is projected to take place in the future. In accounting, it is an amount charged against profits for a specific liability (for example: bad debts, depreciation or taxes). A liability may be known, but the amount is often uncertain. This uncertainty may lead to an adjustment in a later income statement once the final amount of the liability is ascertained.

OPEN ALLOTMENT is where there is no restriction as to an amount that may be taken from that which is being allotted.

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