CB CB Accounts Receivable and Payable Management

Question 1

Which ledger records amounts owed TO your business by customers?

Accepted Answer

Accounts receivable ledger

Answer

Accounts payable ledger

Answer

General ledger

Answer

Cash receipts journal

Question 2

An aging report categorizes outstanding receivables by:

Accepted Answer

How long invoices have been outstanding

Answer

Customer industry

Answer

Invoice amount

Answer

Geographic region

Question 3

When a customer pays their invoice, the bookkeeper debits Cash and credits:

Accepted Answer

Accounts Receivable

Answer

Accounts Payable

Answer

Sales Revenue

Answer

Unearned Revenue

Question 4

A credit memo issued to a customer typically results in:

Accepted Answer

A decrease in accounts receivable

Answer

An increase in accounts receivable

Answer

An increase in accounts payable

Answer

A decrease in cash

Question 5

The allowance method of accounting for bad debts is preferred over the direct write-off method because it:

Accepted Answer

Matches bad debt expense to the period the sale occurred

Answer

Requires less journal entries

Answer

Increases net income

Answer

Eliminates uncollectible accounts

Question 6

When recording a purchase on account, the bookkeeper debits Purchases (or Inventory) and credits:

Accepted Answer

Accounts Payable

Answer

Cash

Answer

Accounts Receivable

Answer

Notes Payable