A bill payable arises on account of sales.

Explanation: In a sale and purchase transactions, the money passes through the buyer to the seller. In a cash sale, the seller receives the money immediately. In credit sales, the seller may allow a certain credit period to the buyer when it becomes “account receivable” or “on account”. The seller may exercise another option in that he draws a bill of exchange on the buyer which the buyer accepts. The accepted bill of exchange can be discounted with a banker for immediate funds. In case the seller is the receiver and the buyer is the payer. So bills payable arises on account of credit purchases.