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
Which ledger records amounts owed TO your business by customers?
Answer: Accounts receivable ledger
The accounts receivable ledger tracks money customers owe to the business for goods or services delivered on credit.
An aging report categorizes outstanding receivables by:
Answer: How long invoices have been outstanding
An aging report groups unpaid invoices into time buckets (0–30, 31–60, 61–90, 90+ days) to identify overdue accounts.
When a customer pays their invoice, the bookkeeper debits Cash and credits:
Answer: Accounts Receivable
Receiving a customer payment reduces the receivable balance, so Accounts Receivable is credited and Cash is debited.
A credit memo issued to a customer typically results in:
Answer: A decrease in accounts receivable
A credit memo reduces the amount the customer owes, thereby decreasing the accounts receivable balance.
The allowance method of accounting for bad debts is preferred over the direct write-off method because it:
Answer: Matches bad debt expense to the period the sale occurred
The allowance method recognizes estimated bad debts in the same period as the related revenue, following the matching principle.
When recording a purchase on account, the bookkeeper debits Purchases (or Inventory) and credits:
Answer: Accounts Payable
Buying on account creates an obligation to pay the supplier, so Accounts Payable—a liability—is credited.