Final answer:
The Accounts Payable Aging Report is used to show what is owed to each vendor, categorizing outstanding invoices by how long they've been due, which assists businesses in managing their debts and maintaining good vendor relationships.
Step-by-step explanation:
The vendor report that shows what is owed to each vendor is known as an Accounts Payable Aging Report. This report categorizes unpaid vendor invoices by the length of time an invoice has been outstanding. It's an essential accounting tool for businesses to manage their debts effectively. By reviewing the Accounts Payable Aging Report, a company's financial team can prioritize payments based on the due dates of the invoices to prevent late fees and maintain healthy relationships with vendors.
An example of how this report might be organized is by listing all vendors with outstanding invoices and grouping them into categories such as 0-30 days, 31-60 days, 61-90 days, and over 90 days past due. This categorization helps in making strategic decisions about which debts to pay first based on terms agreed with vendors and cash flow considerations.