Accounts Payable
Also called AP · A/P · Payables · Trade Payables
Accounts Payable is a liability on the Balance Sheet that represents amounts owed to suppliers or vendors for goods and services that have been received but not paid for yet.
Example
Your lawyer does $500 of work for you. You don’t pay him when he’s finished and promise to pay it in a couple of months. Now, your Accounts Payable balance increases by $500.
Why Accounts Payable matters in investment banking interviews
AP is a free source of financing, and framing it that way in an interview signals maturity. Stretching payables holds onto cash longer, which is exactly why working capital management is a lever sponsors pull after a buyout.