Bills Payable
Bills payable can be a synonym of accounts payable, or it can refer specifically to short-term borrowing by banks from other banks, often the country's central bank. Bills payable can be a synonym of accounts payable, or it can refer specifically to short-term borrowing by banks from other banks, often the country's central bank. In other words, bills payable is the money a bank borrows, mainly on a short-term basis, and owes to other banks. In the context of banking, bills payable refers to a bank's indebtedness to other banks, usually a Federal Reserve Bank (in the U.S.). In the context of personal finance and small business accounting, bills payable are liabilities such as utility bills.
What Are Bills Payable?
Bills payable can be a synonym of accounts payable, or it can refer specifically to short-term borrowing by banks from other banks, often the country's central bank.
Understanding Bills Payable
In the context of personal finance and small business accounting, bills payable are liabilities such as utility bills. They are recorded as accounts payable and listed as current liabilities on a balance sheet.
In the context of banking, bills payable refers to a bank's indebtedness to other banks, usually a Federal Reserve Bank (in the U.S.). These loans are backed by collateral consisting of the bank's promissory note and a pledge of government securities. In other words, bills payable is the money a bank borrows, mainly on a short-term basis, and owes to other banks. Banks borrow this money in order to maintain adequate liquidity levels.
Related terms:
Accounts Payable (AP)
"Accounts payable" (AP) refers to an account within the general ledger representing a company's obligation to pay off a short-term debt to its creditors or suppliers. read more
Certificate of Indebtedness
A certificate of indebtedness was something of an "IOU" from the U.S. government, promising certificate holders a return of their funds with a fixed coupon. read more
Current Liabilities & Example
Current liabilities are a company's debts or obligations that are due to be paid to creditors within one year. read more
Discount Rate
"Discount rate" has two distinct definitions. I can refer to the interest rate that the Federal Reserve charges banks for short-term loans, but it's also used in future cash flow analysis. read more
Monetary Policy
Monetary policy is a set of actions available to a nation's central bank to achieve sustainable economic growth by adjusting the money supply. read more
Negotiable
Negotiable refers to the price of a good or security that is not firmly established or whose ownership is easily transferable from one party to another. read more
Promissory Note , Types, & History
A promissory note is a financial instrument that contains a written promise by one party to pay another party a definite sum of money. read more
Unrestricted Cash
Unrestricted cash is cash that's readily available to be spent for any purpose and has not been pledged as collateral for a debt obligation. read more