CAP Accounts Payable and Receivable Flashcards
6 cards from real CAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CAP Accounts Payable and Receivable flashcards as text
A three-way match in accounts payable compares which three documents?
Answer: Invoice, purchase order, and receiving report
A three-way match verifies that the vendor invoice, purchase order, and receiving report all agree before approving payment.
Which journal entry correctly records a sale of $500 on credit?
Answer: Debit Accounts Receivable $500; Credit Sales Revenue $500
A credit sale increases Accounts Receivable (debit) and Sales Revenue (credit) because cash has not yet been received.
What is a debit memo in the context of accounts payable?
Answer: A document reducing the amount owed to a vendor due to returns or errors
A debit memo is issued by the buyer to reduce the amount owed to a vendor, typically because goods were returned or an overcharge was identified.
Which method records bad debt expense in the same period as the related sale?
Answer: Allowance method
The allowance method estimates and records bad debt expense in the period of sale, matching expenses to revenues per GAAP.
When a previously written-off account is collected, the first step under the allowance method is to:
Answer: Reverse the write-off by reinstating the receivable
The write-off must first be reversed to reinstate the receivable before recording the cash collection.
The accounts payable turnover ratio measures:
Answer: How often a company pays its suppliers in a period
The accounts payable turnover ratio equals total credit purchases divided by average accounts payable, indicating how frequently a company pays suppliers.