CAPA CAPA Financial Reporting 1

Question 1

What is the primary purpose of an accounts payable aging report?

Accepted Answer

To track outstanding vendor invoices by due date

Answer

An AP aging report categorizes outstanding vendor invoices by how long they have been outstanding to help manage payment timing and cash flow.

Question 2

Which financial statement directly reflects accounts payable balances?

Accepted Answer

Balance Sheet

Answer

Accounts payable appears as a current liability on the balance sheet, representing amounts owed to vendors.

Question 3

When an invoice is recorded in accounts payable, which account is typically debited?

Accepted Answer

An expense or asset account

Answer

When recording an invoice, the expense or asset account is debited and accounts payable is credited under double-entry accounting.

Question 4

What does 'accrued liabilities' in AP refer to?

Accepted Answer

Expenses incurred but not yet invoiced

Answer

Accrued liabilities represent expenses the company has incurred but has not yet received a vendor invoice for, requiring an accrual journal entry.

Question 5

Which metric measures how quickly a company pays its suppliers?

Accepted Answer

Days Payable Outstanding (DPO)

Answer

Days Payable Outstanding (DPO) measures the average number of days a company takes to pay its accounts payable to vendors.

CAPA - Certified Accounts Payable Associate Practice Test