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Test answers for Accounts Payable 2016

(77) Last updated: January 27
Elance • Fin. & Mgt.
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77 Answered Test Questions:

1. Per annum means which of the following?

Answers:

• Per decade

• Per day

• Per month

• Per year

2. What is a risk of the purchasing department not granting a rush check?

Answers:

• They risk being sued by valued suppliers

• They risk being granted excessive credit by valued suppliers

• They risk being put on credit hold by valued suppliers

• They risk government intervention

3. If a trade discount of 20% is given to a wholesale customer with a total of x dollars of goods originally purchased, what is the final price the customer pays?

Answers:

• 0.9x

• x

• x-0.2x

• 0.2x

4. What can happen if an invoice is lost?

Answers:

• Extra items appear from the vender

• Nothing can happen since a lost invoice is of little importance

• It can be duplicated

• It can be sent to another company

5. Which of the following is a current liability?

Answers:

• (All of these)

• Payroll taxes payable

• Interest Payable

• Income taxes payable

6. True or False? The account payable for one company corresponds to another company's account receivable.

Answers:

• True

• False

7. Which of the following are accounts payable in a household?

Answers:

• Cable bill

• Power bill

• Magazine subscription

• (All of these)

8. Which of the following is true about a voucher used in accounts payable?

Answers:

• (All of these)

• Can be used for travel

• Can be used housing

• Can be used for food

9. In the context of accounts payable, what is Net 30?

Answers:

• The amount of days buyers are given to try an item

• The amount of days on an item warranty

• Net 30 is trade credit specifying 30 days to be paid

• A 30-day money back guarantee

10. What is the definition of a purchase order?

Answers:

• A document prepared by a company to show what exactly the company is ordering from a supplier

• (None of these)

• A document prepared by a company to show what exactly the company is selling to a supplier

11. What three documents are important when implementing controls to reduce duplicate payments?

Answers:

• Vendor's invoice, dinner order, and business report

• Buyer's invoice, item order, and shipping report

• Vendor's packing slip, purchase order, and agent report

• Vendor's invoice, purchase order, and receiving report

12. What is an invoice?

Answers:

• An order

• A note

• An invoice is a bill

• A sale

13. What is the definition of accounts payable?

Answers:

• The money from a business that it owed and is shown on the balance sheet as an asset.

• The money from a business that it owes and is shown on the balance sheet as a liability.

• (None of these)

14. True or False? A vendor invoice is sent from a vendor to a company for some services or goods rendered.

Answers:

• False

• True

15. True or False? ePayables are often used as automation solutions for large firms.

Answers:

• True

• False

16. True or False? A receiving report is essentially a document from a company that lists the goods it has received.

Answers:

• True

• False

17. A reduced price for a certain product is called which of the following?

Answers:

• trade discount

• cost of a good

• product slash

18. What role does technology serve in the auditing of accounts payable?

Answers:

• Technology allows accounts payable work to be shifted to managers.

• It makes the auditing process easier because all forms can be sent directly to the government.

• Technology allows a company to outsource its accounts payable to competitors.

• Because invoices, expense reports, checks, and other supporting documents are digitized, the auditing process is simpler and more concise.

19. Why is automation of accounts payables a significant technological landmark?

Answers:

• It can significantly reduce the amount of paper invoices.

• Automation means that there is no need for an accounting department.

• Automation means that no employees are needed for accounts payable.

20. If your company is offering your customers a 2/10 net 30 discount, what does this mean?

Answers:

• It means that if the bill is paid in 10 weeks, the company receives a 2 percent discount for life

• It means that if the bill is paid in 10 days, a 2 percent discount is given

• It means that if the bill is paid in 10 hours, a 2 percent discount is given

• It means that if the bill is paid in 100 days, a 20 percent discount is given

21. A company that pays 10% less by paying back what it is owed in a shorter time frame is called what?

Answers:

• Liability discount

• Credit savings

• Early payment discount

• blank check discount

22. If AP pays from a statement, what potential result could occur?

Answers:

• A duplicate payment

• Fraud

• Embezzlement

• Theft

23. What is another term for a supplier?

Answers:

• Distributor

• (None of these)

• Vendor

24. If a paycheck was automatically deposited, what was used to make said transaction?

Answers:

• The IRS

• An Automated Teller Machine

• A mail carrying service

• An Automated Clearing House (ACH)

25. True or False? A balance sheet has the amount owed to creditors in two groups, namely current liabilities and long-term liabilities.

Answers:

• True

• False

26. Which of the following are one of the steps in a Standard Monthly Accounting Closing Cycle?

Answers:

• Establish a Closing Date

• (All of these)

• Reporting

• Adjusting Entries

27. What does the acronym, ???EDI??? mean?

Answers:

• Electronic Data Interchange

• External Data Interface

• Executive Data Interface

• Experimental Data Interface

28. What aspect is most important about the relationship between purchasing and accounts payable?

Answers:

• Cooperation

• Passive-aggressive behavior

• Competition

• Acrimony

29. True of False? For a specific company, an invoice is usually used externally and a voucher is used internally.

Answers:

• True

• False

30. Which of the following is an example of a creditor?

Answers:

• A person

• A Supplier

• (All of these)

• A vendor

31. True of False? A blank check is usually a check that is signed by an employer but lacks any more details like the amount, date, and payee.

Answers:

• False

• True

32. When are long term liabilites typically due?

Answers:

• More than 6 months

• More than 2 years

• More than 1 month

• More than 1 year

33. True or False? Accounts payables are only limited to businesses.

Answers:

• False

• True

34. How should AP deal with check kiting?

Answers:

• Accept blank checks

• Don't accept any checks

• Only accept checks for the exact amount of the transaction

• Only accept checks for more than the amount of the transaction

35. True of False? A trade discount cannot vary between various wholesalers.

Answers:

• True

• False

36. What is the definition of working capital?

Answers:

• Current assets divided by current liabilities

• Current liabilities divided by current assets

• Current liabilities minus current assets

• Current assets minus current liablities

37. What is the definition of working capital?

Answers:

• Current assets divided by current liabilities

• Current liabilities divided by current assets

• Current liabilities minus current assets

• Current assets minus current liablities

38. Why is the purchasing department critical to accounts payable?

Answers:

• The purchasing department is responsible for paying accounts payables salaries

• The purchasing department sets the agreements made with a companies vendors

• The purchasing department is not important to accounts payable

• The purchasing department handles the accounting in accounts payable

39. Which of the following is a common problem with invoices?

Answers:

• The invoice doesn't get paid

• Customers receive the wrong products

• The invoice is not addressed properly, which causes a delay in payment

• The invoice is stolen

40. What three documents are included in a three-way match?

Answers:

• Expense Report, Invoice, and Balance Sheet

• Vendor's invoice, Purchase order, and Receiving order

• Seller's invoice, Total Bill, and Contracting agreement

• 1099, W4, and Inventory report

• Balance sheet, Income Statement, and Cash flows

41. What is a secured creditor?

Answers:

• A creditor that has a legal right to the company's liabilities

• (None of these)

• A creditor that has a legal right to the company's assets

42. Accounts payable information is found reviewing the which of the following?

Answers:

• Contracts and other agreements

• (All of these)

• Purchase orders issued by the company

• Invoices from the company's suppliers

43. What is a benefit of using a procurement card?

Answers:

• Procurement cards are a means to obtain free items

• Procurement cards reduce the amount of time and paperwork in procurement

• Procurement cards are used to identify those working in procurement

• Procurement cards allow businesses to buy more than they can afford

44. What are procurement cards used for?

Answers:

• They are used for the purposes of smooth tax payment

• They are used to take record of late payments

• They are similar to credit cards, issued only for the purpose of procurement

• They are cards that purchasers can trade in lieu of cash

45. If a requester insists on a rushed check to cover a mishap, what is the best method to handle this situation?

Answers:

• With managerial support, deny the rushed check

• Honor the rushed check and forget about it

• Put the rushed check aside with hopes that the requester will forget about it

• Hide the check somewhere in the building

46. What is the definition of a company's current ratio?

Answers:

• Current liabilities minus current assets

• Current assets minus current liablities

• Current assets divided by current liablities

• Current liabilities divided by current assets

47. What are payment gateways used for?

Answers:

• They are used to block all credit card payments

• They are accounts that managers can use to purchase goods and services

• They are a gateway to prevent credit card purchases of any kind

• An on-line service authorizing credit card payments

48. Current liablities are usually due within what period of time?

Answers:

• Depends of the agreement

• 6 months

• 1 year

• 2 years

49. A common rule for companies to avoid a duplicate payment is the following.

Answers:

• Don't pay from vendor invoices but only from vendor statements

• Pay from both a vendor's statements and invoices

• Don't pay from vendor statements but only from vendor invoices.

50. What is one of the advantages of drop shipping?

Answers:

• Allows a company to avoid selling goods to unreliable buyers

• Allows a company to avoid extra costs by decreasing some non-value activites

• (None of these)

51. If accounts payable set up an in-house web page for their daily functions, where would it be hosted?

Answers:

• An external server

• Their computer

• Their intranet

• The internet

52. What would be considered a rushed check?

Answers:

• A check produced outside the normal production cycle

• A check that is produced at a normal rate

• A check that is produced quickly

• A check that is cashed quickly

53. What financial calculation is used to determine a discount's ROI?

Answers:

• Days in a year/Years x Discount paid monthly = ROI

• Days in a year/Weeks x Discount paid early = ROI

• Discount/Discounted Price x Days in a year/Days paid early = ROI

• Weeks in a year/Months x Discount paid early = ROI

54. If a company charges 0.8 percent interest monthy on a monthly balance what is the interest per annum?

Answers:

• 9.6%

• 9%

• 10%

• 8%

55. True or False? When a bill is paid, the accounts payable is increased with a debit entry.

Answers:

• False

• True

56. What is it called when a vendor ships out a product, then an invoice and then finally collects a payment at a later time?

Answers:

• Cash Conversion Cycle

• Working Capital

• Cash discount

• Sales to Cash flow ratio

57. True of False? An irrevocable letter of credit can be changed as long as one of the parties involved agree to a change.

Answers:

• True

• False

58. What is an assumed receipt?

Answers:

• A receipt assuming that you have received all your goods

• An assumption that a receipt is unspoken when goods are delivered

• It is an assumption that goods have been received when an invoice appears in AP

• An assumption by vendors that you have received the receipt

59. Do the rebates procurement card vendors offer exceed discount offers for prompt payment?

Answers:

• Yes. Because payment is made electronically.

• No. Procurement card vendors have to pay a tax so the competition is equal.

• No. Electronic payment takes longer than traditional payment.

• No. Because payment is made manually.

60. When there is an over-shipment of a product to the receiver, what can happen to the invoice?

Answers:

• It can be short-paid

• It can be paid on time

• It can be discarded

• It can be long-paid

61. What is an example of an issue with evaluated receipt settlement?

Answers:

• There are systematic failures because the technology is new

• The packing slip could be fraudulent

• The receipt could be evaluated improperly

• There can be too many rejections and disputes, making ERI more tedious than it should be

62. Your company accidentally sent a duplicate payment. Where is this money sent?

Answers:

• To a 3rd party company, which will settle the dispute

• To the accounts receivable account

• To a miscellaneous income account, which will be attended to when it is reconciled

• The vendor will keep the difference

63. True or false? It is always advantageous to pay an invoice as quickly as possible.

Answers:

• False

• True

64. What is one of the fastest growing mediums for fraud?

Answers:

• Accounts payable

• Faxes

• Email

• Checks

65. If the three-way-match is off by a negligible dollar amount, what happens in Accounts Payable?

Answers:

• Accounts payable consults with accounts receivable

• Accounts payable stops all function to find every missing dollar

• Accounts payable sends an extra charge to the vender

• The discrepancy is forgone and the invoice is simply paid to save time

66. When is the best time to enact fraud detection measures?

Answers:

• During employee vacation

• After employees are terminated

• When employees are hired

• During lunch

67. Accounts payable can usually be broken down into which two categories?

Answers:

• Expense payables and credit payables

• Expense payables and trade payables

• Trade Payables and liabilites

68. True or False? Entertainment and travel is generally a part of accounts payable.

Answers:

• True

• False

69. When a rush check request comes in, what happens to the accounts payable department?

Answers:

• It keeps on working and deals with it after the important work is completed.

• They rush the check back to the sender.

• It has to stop entirely and attend to the rushed check.

• A blank check is sent to the recipient with the knowledge that they will be honest.

70. Which automatic clearing house code refers to a consumer's cross border payments?

Answers:

• XCK

• BOC

• IAT

• SEC

71. What types of checks do corporations typically use?

Answers:

• Formal, or informal.

• Continuous-format, or individual.

• Corporate, or personal.

72. In an irrevocable letter of credit, who is known as the beneficiary?

Answers:

• The seller's bank

• Seller

• The buyer's bank

• Buyer

73. True or false? Another name for accounts payable is notes payable liabilities.

Answers:

• False

• True

74. What design security measure does a check printer use to print the word, ???void??? on a check?

Answers:

• A stenciling

• A lithograph

• A pantograph

• A hologram

75. If AP does not receive a reply from a purchaser, and pays the invoice, what is happening?

Answers:

• AP is assuming a receipt

• Escalating approval

• Fraud

• Negative assurance

76. What is an exceptionally beneficial tool that nearly eliminates the need for AP approvals?

Answers:

• Blocked approvals

• Escalating approvals

• EDI

• Sales contracts

77. True or False? A three-way match is a good way to protect a companies liabilites.

Answers:

• False

• True