What do you understand by the term trade payable?
The term trade payable is the amount payable for purchase of goods and services performed. It is the sum of creditors and bills payable.
- Creditor: A creditor is a person who gives benefit without receiving money immediately but to claim it in future.
- Bills payable: Bill payable is an exchange bill accepted for the amount of which will be payable on the specified date. It is included in trade payables because bills payable replaces a creditor.
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