Accounts Payable and Receivable Flashcards
6 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 6 Accounts Payable and Receivable flashcards as text
In accounts payable, the 'three-way match' is a critical internal control used before paying a vendor. Which three documents are compared in this process?
Answer: Purchase Order, Receiving Report, and Vendor Invoice
The three-way match process involves comparing the Purchase Order (what was ordered), the Receiving Report (what was received), and the Vendor Invoice (what the company is being billed for) to ensure accuracy and legitimacy before issuing payment.
A customer contacts the accounts receivable department stating they were overcharged on an invoice because a sales discount was not applied. What should be the clerk's FIRST course of action?
Answer: Verify the original sales order and contract terms to confirm the discount's applicability.
The first step in handling any invoice dispute is to investigate the claim's validity. The clerk must review the source documents, such as the sales order or contract, to determine if the customer was indeed entitled to the discount. Issuing a credit memo without verification is poor practice, and the other options are either premature or unprofessional.
What is the primary purpose of preparing an Accounts Receivable Aging Report?
Answer: To identify and prioritize overdue customer invoices for collection efforts.
An Accounts Receivable Aging Report categorizes unpaid invoices by the length of time they are past due (e.g., 0-30 days, 31-60 days, 61-90+ days). Its main purpose is to help the collections team manage and prioritize efforts to collect from customers with overdue balances.
A company receives an invoice for $10,000 with payment terms of '2/10, n/30'. If the company has sufficient cash flow, what is the most financially advantageous action to take?
Answer: Pay $9,800 within the first 10 days.
The payment term '2/10, n/30' indicates that a 2% discount is available if the invoice is paid within 10 days; otherwise, the full (net) amount is due in 30 days. Taking the 2% discount on $10,000 results in a $200 savings, making the payment $9,800. This is the best financial option.
When reconciling a vendor statement against the company's accounts payable records, a clerk notices a payment they recorded is not showing on the vendor's statement. What is the most common reason for this discrepancy?
Answer: The payment is in transit and has not yet been processed by the vendor.
A common reconciling item is a 'payment in transit.' This occurs when a company has sent a payment near the end of the reporting period, but the vendor has not yet received or processed it by the time their statement is generated. This is a timing difference that usually resolves itself in the next period.
The finance department wants to measure the average number of days it takes for the company to collect payments from its customers after a sale is made. Which key performance indicator (KPI) should they calculate?
Answer: Days Sales Outstanding (DSO)
Days Sales Outstanding (DSO) is the financial metric used to measure the average number of days a company takes to collect its accounts receivable after a sale. A lower DSO indicates a company collects its receivables more quickly. The other options measure liquidity, payment efficiency to suppliers, and profitability, respectively.