Accounts receivable (A/R) is an accounting term that refers to money someone owes to a store or business. If you buy something from a store, but don’t pay them right away – the amount that you owe goes into the store’s accounts receivable record.
Most large companies have an entire accounts receivable department that is solely focused on keeping track of money owed to the company.
Accounts payable (A/Ps) is an accounting term that refers to money owed by a person or business to another person or business.
For example, if an office has bottled water delivered each week but doesn’t pay for it until the end of the month, the charge goes into accounts payable until the check is written. Employee paychecks also fall into the category of accounts payable until they are actually given out to employees.