AAT L3 Accounts Payable & Receivable Advanced 1 — Questions and Answers
Question 1: The aged receivables report is used to:
- Calculate VAT owed to HMRC
- Identify how long customer invoices have been outstanding, aiding credit control (Correct answer)
- Record all cash receipts in the period
- Prepare the year-end trial balance
Correct answer: Identify how long customer invoices have been outstanding, aiding credit control
An aged receivables (debtors) report categorises outstanding customer invoices by age (e.g., 0–30 days, 31–60 days, 61–90 days, over 90 days), helping the credit control team prioritise collection activity.
Question 2: A statement of account sent to a customer is used to:
- Request a credit note from the supplier
- Confirm the balance owed by the customer, listing all invoices, payments, and credits (Correct answer)
- Replace the sales invoice
- Process a refund to the customer
Correct answer: Confirm the balance owed by the customer, listing all invoices, payments, and credits
A statement of account summarises all transactions between the business and the customer — invoices raised, payments received, and credit notes issued — confirming the net outstanding balance due.
Question 3: A credit limit for a customer should be set based on:
- The customer's geographic location
- An assessment of the customer's creditworthiness, payment history, and financial position (Correct answer)
- The value of the most recent order only
- The business's own cash position
Correct answer: An assessment of the customer's creditworthiness, payment history, and financial position
Credit limits should reflect the customer's ability to pay — assessed using credit references, payment history, financial statements, and credit agency reports — to manage the risk of bad debts.
Question 4: When a supplier sends a statement of account, the purchase ledger team should:
- File it without review
- Reconcile it against the purchase ledger to identify discrepancies (Correct answer)
- Pay it immediately
- Return it to the supplier as unnecessary
Correct answer: Reconcile it against the purchase ledger to identify discrepancies
Supplier statement reconciliation is an important internal control; by comparing the supplier's statement to the purchase ledger, the team can identify invoices not yet posted, disputed items, or timing differences.
Question 5: Which document authorises the payment of a purchase invoice?
- Purchase requisition
- Goods received note
- Authorised payment schedule or approved purchase invoice (Correct answer)
- Delivery note from the customer
Correct answer: Authorised payment schedule or approved purchase invoice
Before paying a supplier, the invoice should be matched against the purchase order and goods received note (three-way match), then formally approved/authorised by an appropriate manager before payment is processed.
Question 6: The purpose of a remittance advice sent to a supplier is to:
- Request a discount on the invoice
- Inform the supplier which invoices and credit notes are included in a payment (Correct answer)
- Confirm the delivery of goods
- Query an invoice amount
Correct answer: Inform the supplier which invoices and credit notes are included in a payment
A remittance advice accompanies (or is sent alongside) a payment, listing the invoices being settled, any credit notes offset, and discounts taken — helping the supplier allocate the payment correctly in their ledger.
AAT L3 Accounts Payable & Receivable Advanced 1
The aged receivables report is used to: