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In this video, you will learn the difference between account payable and account receivable in accounting. It is important to distinguish between them as one is a liability account and the other is an asset account. Mixing them up can disrupt the balance in your accounting equation and financial statements. Accounts payable tracks money owed to third parties, while accounts receivable tracks money that others owe to you. Accounts payable often include purchases made for goods or services with repayment terms that can vary.
