AAT L3 Accounts Payable & Receivable Advanced 3

Question 1

A credit note received from a supplier reduces:

Accepted Answer

The amount owed by the business to the supplier

Answer

A credit note from a supplier reduces the outstanding balance on the supplier's account in the purchase ledger, reflecting goods returned, overcharges corrected, or allowances given.

Question 2

The sales ledger control account (SLCA) opening balance was £18,000. During the month, invoices of £42,000 were issued, receipts of £35,000 were collected, and discounts of £1,000 were allowed. What is the closing balance?

Accepted Answer

£24,000

Answer

Closing balance = £18,000 + £42,000 − £35,000 − £1,000 = £24,000. Invoices increase the balance; receipts and discounts reduce it.

Question 3

Which of the following is a method used to assess the creditworthiness of a new trade customer?

Accepted Answer

Obtaining a credit reference agency report, bank reference, or trade references

Answer

Before granting credit, businesses typically obtain a credit reference agency report (showing payment history and county court judgements), bank references, and trade references from other suppliers the customer uses.

Question 4

In accounts payable, an accrual at period end is required when:

Accepted Answer

Goods or services have been received before the period end but the invoice has not yet been received

Answer

An accrual is needed when an expense has been incurred (goods or services received) before the period end, but the supplier has not yet raised or sent the invoice — ensuring the cost is recognised in the correct period.

Question 5

Which document triggers the recording of a purchase in the accounts payable ledger?

Accepted Answer

Supplier's invoice (matched and approved)

Answer

The supplier's invoice, once received and matched against the purchase order and goods received note, is the document that triggers the posting of the purchase to the purchase ledger and the general ledger.

AAT Level 3 Practice Test

AAT Level 3 Practice Test

AAT L3 Accounts Payable & Receivable Advanced 3