Accounts payable (AP) is an accounting entry detailing your debts to creditors. Accounts payable are sometimes be referred to as "payables," and usually refer to goods or services received. Your list of payables is an important part of your balance sheet.

Accounts receivable (AR) refers to money that customers and other institutions owe your business. Usually receivables are organized by notes, statements, invoices or other written evidence. You should include your receivables on your balance sheet to maintain a record of how money is flowing in and out of your business.