what catergorie does accounts payable belong to? income statement or statement of changes in owner equity or balance sheet. im not sure but i think balance sheet.

You are correct! By definition Accounts Payable is a liability and belongs on a Balance Sheet. Only income and expenses are included in an Income Statement.

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Sra

You are correct! Accounts payable is a category that belongs to the balance sheet. Let me explain how you can determine the category of an account:

When analyzing financial statements, it's important to understand the three main financial statements: the income statement, the statement of changes in owner's equity, and the balance sheet.

The income statement (also known as the profit and loss statement) shows a company's revenues, expenses, and net income (or net loss) over a specific period. It focuses on the company's operational performance and does not include balance sheet accounts.

The statement of changes in owner's equity reflects changes in the owner's equity of a company, including investments, withdrawals, and net income (or net loss) from the income statement. This statement is useful in sole proprietorships and partnerships, where the owner's capital account changes.

The balance sheet, on the other hand, presents a snapshot of a company's financial position at a specific moment in time (usually the end of an accounting period). It includes assets, liabilities, and owner's equity. Accounts payable falls under the category of liabilities on the balance sheet.

Liabilities represent the obligations of a company to pay debts or fulfill other financial responsibilities. Accounts payable specifically refers to the money owed by a company to its creditors or suppliers for goods and services received but not yet paid for.

To summarize, accounts payable is categorized under liabilities on the balance sheet, as it represents the company's outstanding debts to third parties.