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How to Differentiate Account Receivable and Account Payable of a Company

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Account-PayableAccount receivable and account payable are the two crucial aspects of a business, which have to be maintained in an effective manner in order to reap benefits of maximum ROI. While account payables are the amounts a company owes when it purchase goods and services on credit from a vendor, accounts receivable are amounts a company has right to get or collect as it has sold goods or services to a customer on credit. A sale of a company is a purchase for another company and thus, account payable of a company is account receivable for another company. Essentially, on the balance sheet of a company, accounts receivable are recorded as assets, whereas account payables are recorded as liabilities.

The below stated table will provide an insight into the both account payable and account receivable concept of Singapore accounting.

Account Receivable Account Payable
Brief Definition An amount that the others owe to a company An amount that the company owes to others
Short Forms A/R A/P
Recorded as Asset Liability
Effects on Business Account Receivable increases the profit level (cash) of business Account Payable decreases the profit level of business
Transaction Type Selling goods or services on credit Purchasing goods or services on credit

 

Professional accounting services of accountingservice.com.sg cover the both account payable and account receivable services. In Singapore accounting, demand for both account receivable and account payable are huge. Keeping in view the rising demand among the businesses, the firm has prompted to introduce a specialize services for their clients. It has an expert professional team with extensive knowledge of Singapore accounting standards and regulations of ACRA that has enabled the firm to set a milestone in the industry.