Question:* Per annum means which of the following?
Answer: • Per year
Question:* What is a risk of the purchasing department not granting a rush check?
Answer: • They risk being put on credit hold by valued suppliers
Question:* 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?
Answer: • x-0.2x
Question:* What can happen if an invoice is lost?
Answer: • It can be duplicated
Question:* Which of the following is a current liability?
Answer: • (All of these)
Question:* True or False? The account payable for one company corresponds to another company's account receivable.
Answer: • True
Question:* Which of the following are accounts payable in a household?
Answer: • (All of these)
Question:* Which of the following is true about a voucher used in accounts payable?
Answer: • (All of these)
Question:* In the context of accounts payable, what is Net 30?
Answer: • Net 30 is trade credit specifying 30 days to be paid
Question:* What is the definition of a purchase order?
Answer: • A document prepared by a company to show what exactly the company is ordering from a supplier
Question:* What three documents are important when implementing controls to reduce duplicate payments?
Answer: • Vendor's invoice, purchase order, and receiving report
Question:* What is an invoice?
Answer: • An invoice is a bill
Question:* What is the definition of accounts payable?
Answer: • The money from a business that it owes and is shown on the balance sheet as a liability.
Question:* True or False? A vendor invoice is sent from a vendor to a company for some services or goods rendered.
Answer: • True
Question:* True or False? ePayables are often used as automation solutions for large firms.
Answer: • True
Question:* True or False? A receiving report is essentially a document from a company that lists the goods it has received.
Answer: • True
Question:* A reduced price for a certain product is called which of the following?
Answer: • trade discount
Question:* What role does technology serve in the auditing of accounts payable?
Answer: • Because invoices, expense reports, checks, and other supporting documents are digitized, the auditing process is simpler and more concise.
Question:* Why is automation of accounts payables a significant technological landmark?
Answer: • It can significantly reduce the amount of paper invoices.
Question:* If your company is offering your customers a 2/10 net 30 discount, what does this mean?
Answer: • It means that if the bill is paid in 10 days, a 2 percent discount is given
Question:* A company that pays 10% less by paying back what it is owed in a shorter time frame is called what?
Answer: • Early payment discount
Question:* If AP pays from a statement, what potential result could occur?
Answer: • A duplicate payment
Question:* What is another term for a supplier?
Answer: • Vendor
Question:* If a paycheck was automatically deposited, what was used to make said transaction?
Answer: • An Automated Clearing House (ACH)
Question:* True or False? A balance sheet has the amount owed to creditors in two groups, namely current liabilities and long-term liabilities.
Answer: • True
Question:* Which of the following are one of the steps in a Standard Monthly Accounting Closing Cycle?
Answer: • (All of these)
Question:* What does the acronym, “EDI” mean?
Answer: • Electronic Data Interchange
Question:* What aspect is most important about the relationship between purchasing and accounts payable?
Answer: • Cooperation
Question:* True of False? For a specific company, an invoice is usually used externally and a voucher is used internally.
Answer: • True
Question:* Which of the following is an example of a creditor?
Answer: • (All of these)
Question:* 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.
Answer: • True
Question:* When are long term liabilites typically due?
Answer: • More than 1 year
Question:* True or False? Accounts payables are only limited to businesses.
Answer: • False
Question:* How should AP deal with check kiting?
Answer: • Only accept checks for the exact amount of the transaction
Question:* True of False? A trade discount cannot vary between various wholesalers.
Answer: • False
Question:* What is the definition of working capital?
Answer: • Current assets minus current liablities
Question:* What is the definition of working capital?
Answer: • Current assets minus current liablities
Question:* Why is the purchasing department critical to accounts payable?
Answer: • The purchasing department sets the agreements made with a companies vendors
Question:* Which of the following is a common problem with invoices?
Answer: • The invoice is not addressed properly, which causes a delay in payment
Question:* What three documents are included in a three-way match?
Answer: • Vendor's invoice, Purchase order, and Receiving order
Question:* What is a secured creditor?
Answer: • A creditor that has a legal right to the company's assets
Question:* Accounts payable information is found reviewing the which of the following?
Answer: • (All of these)
Question:* What is a benefit of using a procurement card?
Answer: • Procurement cards reduce the amount of time and paperwork in procurement
Question:* What are procurement cards used for?
Answer: • They are similar to credit cards, issued only for the purpose of procurement
Question:* If a requester insists on a rushed check to cover a mishap, what is the best method to handle this situation?
Answer: • With managerial support, deny the rushed check
Question:* What is the definition of a company's current ratio?
Answer: • Current assets divided by current liablities
Question:* What are payment gateways used for?
Answer: • An on-line service authorizing credit card payments
Question:* Current liablities are usually due within what period of time?
Answer: • 1 year
Question:* A common rule for companies to avoid a duplicate payment is the following.
Answer: • Don't pay from vendor statements but only from vendor invoices.
Question:* What is one of the advantages of drop shipping?
Answer: • Allows a company to avoid extra costs by decreasing some non-value activites
Question:* If accounts payable set up an in-house web page for their daily functions, where would it be hosted?
Answer: • Their intranet
Question:* What would be considered a rushed check?
Answer: • A check produced outside the normal production cycle
Question:* What financial calculation is used to determine a discount's ROI?
Answer: • Discount/Discounted Price x Days in a year/Days paid early = ROI
Question:* If a company charges 0.8 percent interest monthy on a monthly balance what is the interest per annum?
Answer: • 9.6%
Question:* True or False? When a bill is paid, the accounts payable is increased with a debit entry.
Answer: • False
Question:* What is it called when a vendor ships out a product, then an invoice and then finally collects a payment at a later time?
Answer: • Cash Conversion Cycle
Question:* True of False? An irrevocable letter of credit can be changed as long as one of the parties involved agree to a change.
Answer: • False
Question:* What is an assumed receipt?
Answer: • It is an assumption that goods have been received when an invoice appears in AP
Question:* Do the rebates procurement card vendors offer exceed discount offers for prompt payment?
Answer: • Yes. Because payment is made electronically.
Question:* When there is an over-shipment of a product to the receiver, what can happen to the invoice?
Answer: • It can be short-paid
Question:* What is an example of an issue with evaluated receipt settlement?
Answer: • There can be too many rejections and disputes, making ERI more tedious than it should be
Question:* Your company accidentally sent a duplicate payment. Where is this money sent?
Answer: • To a miscellaneous income account, which will be attended to when it is reconciled
Question:* True or false? It is always advantageous to pay an invoice as quickly as possible.
Answer: • False
Question:* What is one of the fastest growing mediums for fraud?
Answer: • Checks
Question:* If the three-way-match is off by a negligible dollar amount, what happens in Accounts Payable?
Answer: • The discrepancy is forgone and the invoice is simply paid to save time
Question:* When is the best time to enact fraud detection measures?
Answer: • During employee vacation
Question:* Accounts payable can usually be broken down into which two categories?
Answer: • Expense payables and trade payables
Question:* True or False? Entertainment and travel is generally a part of accounts payable.
Answer: • True
Question:* When a rush check request comes in, what happens to the accounts payable department?
Answer: • It has to stop entirely and attend to the rushed check.
Question:* Which automatic clearing house code refers to a consumer's cross border payments?
Answer: • IAT
Question:* What types of checks do corporations typically use?
Answer: • Continuous-format, or individual.
Question:* In an irrevocable letter of credit, who is known as the beneficiary?
Answer: • Seller
Question:* True or false? Another name for accounts payable is notes payable liabilities.
Answer: • False
Question:* What design security measure does a check printer use to print the word, “void” on a check?
Answer: • A pantograph
Question:* If AP does not receive a reply from a purchaser, and pays the invoice, what is happening?
Answer: • Negative assurance
Question:* What is an exceptionally beneficial tool that nearly eliminates the need for AP approvals?
Answer: • Escalating approvals
Question:* True or False? A three-way match is a good way to protect a companies liabilites.
Answer: • False
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