AAT L3 Accounts Payable & Receivable Advanced 6

Question 1

When a customer pays an invoice but disputes part of it, the accounts receivable team should:

Accepted Answer

Allocate the undisputed payment and pursue the disputed balance separately, investigating the query

Answer

Part payments should be allocated to the undisputed amount while the query is investigated; raising a credit note or adjusting the balance should only be done once the dispute is resolved — not automatically written off.

Question 2

A contra entry between the sales and purchase ledgers is appropriate when:

Accepted Answer

The same entity is both a customer and a supplier, and both parties agree to offset the balances

Answer

A contra entry offsets the trade receivable balance (what the customer owes) against the trade payable balance (what the business owes the same party as supplier), reducing both balances by the offset amount.

Question 3

The primary objective of credit control is to:

Accepted Answer

Ensure that customers pay within agreed credit terms, minimising bad debts and optimising cash flow

Answer

Credit control aims to ensure timely collection of money owed by customers, reducing overdue debts, minimising bad debts, and maximising the business's cash flow and working capital.

Question 4

Which of the following best describes the purpose of an aged payables report?

Accepted Answer

To show how long supplier invoices have been outstanding and identify potential late payment issues

Answer

The aged payables report categorises outstanding supplier invoices by age, helping the accounts payable team prioritise payments, avoid late payment penalties, and maintain good supplier relationships.

Question 5

A business has credit terms of 30 days. An invoice dated 1 March is due for payment on:

Accepted Answer

31 March

Answer

Net 30-day terms mean payment is due 30 days after the invoice date. An invoice dated 1 March is due on 31 March (1 March + 30 days).

AAT Level 3 Practice Test

AAT Level 3 Practice Test

AAT L3 Accounts Payable & Receivable Advanced 6