Accounts Payable is normally considered a short-term liability or a current liability. It is considered to be payable within a year. Accounts Payable is used when a customer or a business purchases goods before payment. A trick in accounting is that any time you see a "payable" i.e bonds payable, dividends payable, notes payable, it is always a liability.
Example:
On March 1st, Adequate Disclosure, Inc. decides to purchase a building with the cost of $900,000, from Inadequate Disclosure, Inc. Adequate Disclosure, Inc. does not have that capital on hand to pay for the building however decides to pay with a non-interest bearing note. Record the journal entry on Adequate Disclosure, Inc.'s books on March 1st.
