Master the MBLEx 2025 – Unleash Your Healing Hands!

The statement that accounts payable is a record of monies owed by a practitioner to individuals or organizations accurately encapsulates the concept. Accounts payable refers to the liabilities that a business owes to its suppliers or creditors for purchases made on credit. This could include everything from goods and services received to invoices that are outstanding. Understanding how accounts payable functions is critical for managing cash flow and ensuring that expenses are paid on time, which thus contributes to the overall financial health of a practice.

The other options do not correctly reflect the definition or function of accounts payable. A system that helps to ensure a product is not out of stock relates more to inventory management rather than liabilities. A summary of income and expenses pertains to financial reporting and is commonly referred to as a profit and loss statement or income statement, which again does not match the accounts payable definition. Lastly, a ledger detailing transactions from the petty cash account focuses on a small amount of cash on hand meant for minor expenses and does not represent the broader context of amounts owed to creditors.