Accounts Payable and Receivable Flashcards
7 cards from real Robert Half Assessment Test practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Accounts Payable and Receivable flashcards as text
A vendor invoice dated June 1 has terms of 2/10, net 45. If payment is made on June 9, what discount applies?
Answer: 2% discount because payment is within 10 days
Terms 2/10 mean a 2% discount is available if payment is made within 10 days of the invoice date, and June 9 is 8 days after June 1.
Which internal control best prevents duplicate payment of vendor invoices?
Answer: Matching each invoice to a unique purchase order and receiving report before payment
Three-way matching (invoice, purchase order, and receiving report) ensures each invoice is legitimate and unique before payment is processed.
What does a debit balance in Accounts Payable typically indicate?
Answer: An overpayment or vendor credit situation
Accounts Payable normally carries a credit balance; a debit balance suggests the company overpaid a vendor or received a credit memo that has not been offset.
A customer has a $5,000 balance with payment terms of net 30. On day 45, the customer has not paid. What is the FIRST step in the collections process?
Answer: Send a formal past-due notice or make a collection call
Standard AR collections practice begins with a past-due notice or direct contact to remind the customer and determine the reason for non-payment.
What journal entry records the allowance method to recognize estimated bad debt expense?
Answer: Debit Bad Debt Expense, Credit Allowance for Doubtful Accounts
Under the allowance method, Bad Debt Expense is debited and the contra-asset Allowance for Doubtful Accounts is credited to recognize estimated uncollectible amounts.
Which document authorizes the AP department to release payment to a vendor?
Answer: An approved payment voucher or check request
An approved payment voucher (or check request) is the internal authorization document that triggers the AP department to issue payment.
On an aging report, a receivable classified as '91–120 days past due' should be treated how, compared to a '1–30 days past due' balance?
Answer: Assigned a higher estimated uncollectible percentage
Older receivables have a statistically higher probability of non-collection, so aging analysis applies progressively higher uncollectible percentages to older buckets.