Cliff Clavin and Norm Peterson sipped their beers and giggled nervously. Two gum-chewing blonde twins were sitting at a table in the corner and kept looking at them and smiling. (Poor Cliff and Norm had no idea that these were two larcenous ladies, bent on market mayhem, skilled in wide-eyed chicanery,... I could go on, but you might want to jut read their profile.)

Norm took a big swig of beer, but dribbled some down his shirt. Cliff non-chalantly popped some peanuts into his mouth and promptly began coughing. He coughed one of them into Norm's beer but Norm drank it anyway.

Incredibly, despite this amazing show of bravado, the women approached the postman and accountant and sat on either side of them.

"Hi, I'm Smile!"

"And I'm Dial!"

Norm and Cliff, stunned by the attention, introduced themselves as suavely as possible.

"Uh,... uh... I'm uh...Norm."

"C-c-c-c-liff!"

Passing by, Carla chuckled to herself. Actually, she cackled out loud.

Smile spoke next. "Hey, fellas. You look like two guys who need a hot stock tip."

Dial added, "And have we got one for ya!"

"Uh, sure."

"Yeah, what?"

Smile'n'Dial looked at each other, wondering whether these two had between them enough of a brain to be taken in by their wily maneuvers. They proceeded anyway.

Smile continued... "You two should look into the Manly-Burly Fashion Warehouse <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BURLY)") else Response.Write("(Nasdaq: BURLY)") end if %>. It's drawing lots of men with its rugged, beefy, 'Testoster-wear'."

Dial interjected: "I don't know, Dial, these guys don't look like they might be the right type to invest in aggressive stocks that are going to triple in a year. Maybe we should see if they're interested in 'Wusses R Us' or 'We B Wimps'."

"Hey -- we are interested in this Hurly-Burly business. We always invest in aggressive stocks," explained Norm.

"We're wimps investing not," said Cliff, getting out all the words he wanted to get out, but unfortunately scrambling their order. He added, "Where sign do we?"

Diane Chambers had been listening intently to the conversation. She couldn't help but interject, "Excuse me, Norman and Clifford, but shouldn't you examine the company's financial statements first? And Norman -- you're an accountant!"

"Oh -- that's right," muttered Norm. Smile handed over an annual report. She held it at such an angle that the super-glossy cover reflected the overhead lights into Cliff's eye.

"Aghh!" Yelped Cliff. Carla walked by and spilled some beer on his shoes.

Norm was soon flipping through the annual report, showing off his number-crunching smarts. He explained his findings.

"Oh, this is very impressive. Very, very impressive. Sales haven't grown too quickly, but Accounts Payable are going through the roof."

Sam, Diane and Carla hovered nearby, curious to see Norm's accounting acumen on display. Norm went on.

"See this incredible growth in Accounts Payable? It was only $50,000 three years ago, but now it's $3 million! Wow. This is dynamic growth, folks. Many people will be paying Manly-Burly a lot of money in the near future. Earnings are really going to sky-rocket."

Smile and Dial looked at each other and rolled their eyes. It wasn't often that the people they set out to con ended up conning each other. Dial shuffled through papers in her briefcase, looking for some paperwork for these bozos to sign.

Just then, someone at the other end of the bar coughed.

Carla barked, "Shut up -- we're hearing about an investing gold mine here!"

The velvet-capped stranger spoke anyway. "I'm Motli Fool, and I'm here to..."

Carla interrupted her. "Look, we've got our own motley bunch of fools here."

Diane added, "A sillier bunch of ninnies you'd be hard-pressed to find."

"Well, I just wanted to warn you that Manly-Burly isn't the gold mine it appears to be. You shouldn't invest in this company because the big increase in Accounts Payable is a bad thing."

"Huh?" Norm looked puzzled. He lifted his mug of beer but just before he took a sip, his brain cells ran out of beer and cleared up. For a split second, there was a moment of clarity and a few accounting basics came back to him. He blurted out, "Doh!" and slapped his forehead. Then he gulped down another half-mug of beer in a single swig.

What had Norm Peterson remembered, if only for a fleeting moment?

1) That Accounts Payable represent funds a company owes to others.

2) That Accounts Payable represent funds others owe to a company.

3) That Accounts Payable represent accumulated net income that has been retained for reinvestment.

4) That Accounts Payable represent investments in the debt of another party.

Enter your selection in the field to the lower right, and get immediate feedback on the answer!

And the answer is...

1) That Accounts Payable represent funds a company owes to others.

Norm was initially confusing Accounts Payable with Accounts Receivable. Accounts Receivable are what a company is owed by others. But even a large, disproportionate increase in this isn't good, as it suggests that the company isn't collecting what it's owed very efficiently.

Meanwhile, Accounts Payable is money that a company owes to others. And Manly-Burly appears to have racked up quite a bit of debt. This is most definitely not a good sign and coupled with the fact that sales haven't been increasing does not make for an attractive investment candidate..

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