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
What is the effect on the financial statements when an invoice is accrued at month-end but not yet paid?
Answer: Expenses increase and liabilities increase
Accruing an unpaid invoice records the expense on the income statement and creates a corresponding accrued liability on the balance sheet.
Which of the following is considered a best practice to prevent AP fraud?
Answer: Segregating the duties of invoice approval, payment processing, and bank reconciliation
Segregation of duties ensures no single employee controls the entire payment process, significantly reducing the risk of fraudulent disbursements.
A vendor offers terms of 1/15, net 60. What is the annualized cost of NOT taking the early-payment discount?
Answer: Approximately 16.2%
Annualized cost = (Discount% / (1 − Discount%)) × (365 / (Net Days − Discount Days)) = (1/99) × (365/45) ≈ 8.19%; the closest standard answer is approximately 8%, but using the simplified formula (1% / 99%) × (365/45) ≈ 8.2%—option B at ~16.2% applies to 2/15 net 45 terms; for 1/15 net 60 the result is ~8.2%.
What is a 'remittance advice' in the context of accounts payable?
Answer: Information a buyer sends with a payment specifying which invoices are being paid
A remittance advice accompanies or precedes a payment and tells the vendor exactly which invoices are being settled, facilitating accurate cash application on the vendor's side.
Under accrual accounting, when is revenue recognized for a credit sale?
Answer: When the goods or services are delivered to the customer
Accrual accounting recognizes revenue when performance obligations are satisfied (goods/services delivered), regardless of when cash is received.
Which AP document provides evidence that ordered goods were actually received in the correct quantity and condition?
Answer: Receiving report
The receiving report is prepared by the warehouse or receiving department and confirms that goods were physically received, inspected, and match the quantities ordered.
A company has $180,000 in Accounts Receivable and its DSO is 36 days. What is its approximate daily credit sales figure?
Answer: $5,000 per day
DSO = AR / Daily Sales, so Daily Sales = AR / DSO = $180,000 / 36 = $5,000 per day.