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The liability arising from the purchase of goods on credit is called
The liability arising from the purchase of goods on credit is called Creditors.
When a company purchases goods on credit which needs to be paid back in a short period of time, it is known as Accounts Payable. It is treated as a liability and comes under the head 'current liabilities'. Accounts Payable is a short-term debt payment which needs to be paid to avoid default.
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