Accounts Payable & Receivable Advanced Flashcards
6 cards from real AAT L3 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Accounts Payable & Receivable Advanced flashcards as text
A credit note received from a supplier reduces:
Answer: The amount owed by the business to the supplier
A credit note from a supplier reduces the outstanding balance on the supplier's account in the purchase ledger, reflecting goods returned, overcharges corrected, or allowances given.
The sales ledger control account (SLCA) opening balance was £18,000. During the month, invoices of £42,000 were issued, receipts of £35,000 were collected, and discounts of £1,000 were allowed. What is the closing balance?
Answer: £24,000
Closing balance = £18,000 + £42,000 − £35,000 − £1,000 = £24,000. Invoices increase the balance; receipts and discounts reduce it.
Which of the following is a method used to assess the creditworthiness of a new trade customer?
Answer: Obtaining a credit reference agency report, bank reference, or trade references
Before granting credit, businesses typically obtain a credit reference agency report (showing payment history and county court judgements), bank references, and trade references from other suppliers the customer uses.
In accounts payable, an accrual at period end is required when:
Answer: Goods or services have been received before the period end but the invoice has not yet been received
An accrual is needed when an expense has been incurred (goods or services received) before the period end, but the supplier has not yet raised or sent the invoice — ensuring the cost is recognised in the correct period.
Which document triggers the recording of a purchase in the accounts payable ledger?
Answer: Supplier's invoice (matched and approved)
The supplier's invoice, once received and matched against the purchase order and goods received note, is the document that triggers the posting of the purchase to the purchase ledger and the general ledger.
Prompt payment of supplier invoices is important because it:
Answer: Maintains good supplier relationships and may retain early payment discounts
Timely payment maintains supplier goodwill, ensures continued supply of goods and services, may qualify for settlement discounts, and protects the business's credit reputation with suppliers.