CB Accounts Receivable and Payable Management Flashcards
6 cards from real CB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CB Accounts Receivable and Payable Management flashcards as text
A vendor invoice shows terms '2/10, net 30'. What does the '2/10' mean?
Answer: A 2% discount if paid within 10 days
The term '2/10' means the buyer earns a 2% early-payment discount if the invoice is paid within 10 days.
Which journal is typically used to record cash payments to vendors?
Answer: Cash payments journal
The cash payments journal (also called the cash disbursements journal) records all cash payments, including vendor payments.
A three-way match in accounts payable compares the purchase order, receiving report, and:
Answer: Vendor invoice
A three-way match verifies that the purchase order, receiving report, and vendor invoice all agree before approving payment.
What is the effect of a debit balance in the Accounts Payable account?
Answer: Abnormal; the business may have overpaid a vendor
Accounts Payable normally carries a credit balance; a debit balance indicates a possible overpayment or duplicate payment to a vendor.
Which document initiates a purchase in a proper internal control environment?
Answer: Purchase order
A purchase order, issued by the buyer before goods are received, formally authorizes a purchase and initiates the procurement process.
Accrued liabilities for unpaid vendor bills are recorded because of the:
Answer: Matching principle
Accruals ensure expenses are recorded in the period they are incurred, matching costs to the revenues they help generate.