Accounts Payable (AP) – Debts of an individual or an organizations that are owed to another entity for goods and/or services received. AP entries are usually found within the balance sheet under current liabilities.

Accounts Receivable (AR) – Credits made to an individual or a company, in which the sale has been made, but payment has not yet been received. AR is normally credited as an asset on the balance sheet for they have the goods/services but have yet to pay the supplier or other party.