Business Services Business Services Finance & Accounting 1

Question 1

What is accounts payable (AP) in a business services context?

Accepted Answer

Money the business owes to suppliers and vendors

Answer

Accounts payable represents short-term liabilities a company owes to its suppliers or vendors for goods and services received.

Question 2

Which financial document summarizes a company's revenues and expenses over a specific period?

Accepted Answer

Income statement

Answer

The income statement (profit and loss statement) shows revenues, expenses, and net profit or loss over a given reporting period.

Question 3

What does 'Days Sales Outstanding' (DSO) measure?

Accepted Answer

Average number of days to collect payment after a sale

Answer

DSO measures the average number of days it takes a company to collect payment from customers after making a sale.

Question 4

In financial services outsourcing, what is 'procure-to-pay' (P2P)?

Accepted Answer

An end-to-end process from purchasing goods to making payment to vendors

Answer

Procure-to-pay (P2P) covers the complete cycle from raising a purchase requisition through ordering, receiving, and paying for goods or services.

Question 5

Which US accounting standard do publicly traded US companies use for financial reporting?

Accepted Answer

GAAP

Answer

US Generally Accepted Accounting Principles (GAAP) are the accounting standards used by US public companies for financial reporting.

Business Services Practice Test