Trade payables are a form of accounts payable in which the amount due for goods or services is billed based on the supplier’s terms (as opposed to, for example, payment due immediately). Although trade payables are often physical goods, such as inventory or materials, they are really any account payable transacted based on terms, such as dividends, or utilities.
How are Trade Payables Recorded?
Because their terms typically require payment within a year’s time, trade payables are most often recorded as current liabilities on the ledger.
NOTE: Although the two terms are often used interchangeably, trades payable and accounts payable are somewhat different. See the accounts payable topic for a definition and examples.