COA Invoice Processing & Accounts Payable

Question 1

What is the primary purpose of a purchase order (PO) in the accounts payable process?

Accepted Answer

It is a formal document authorizing a purchase and establishing agreed-upon terms before goods are received

Answer

A purchase order is issued by the buyer BEFORE receiving goods or services. It formally authorizes the purchase, specifies items, quantities, and agreed prices, and creates a binding procurement record.

Question 2

In a 'three-way match' process, which three documents are compared before an invoice is approved for payment?

Accepted Answer

Purchase order, receiving report, and vendor invoice

Answer

A three-way match compares: (1) the purchase order (what was authorized to buy), (2) the receiving report (what was actually delivered), and (3) the vendor invoice (what is being billed). All three must align before payment is released.

Question 3

Invoice payment terms stated as 'Net 30' mean:

Accepted Answer

Full payment is due within 30 days of the invoice date

Answer

'Net 30' is a standard payment term indicating the full invoice amount is due within 30 calendar days from the invoice date. 'Net' refers to the total amount owed with no discount applied.

Question 4

An office administrator notices the amount on a vendor invoice does not match the corresponding purchase order. What is the correct next step?

Accepted Answer

Place the payment on hold and contact the vendor to resolve the discrepancy

Answer

Payment controls require all documents to match before funds are released. A discrepancy must be investigated and resolved with the vendor to prevent overpayment, unauthorized charges, or accounting errors.

Question 5

Which of the following BEST describes 'accounts payable' (AP)?

Accepted Answer

Money the company owes to vendors and suppliers for purchases received but not yet paid

Answer

Accounts payable represents the company's short-term obligations to vendors and suppliers for goods or services already received but not yet paid. It appears as a liability on the balance sheet.

(COA) Certified Office Administration Practice Test

(COA) Certified Office Administration Practice Test

COA Invoice Processing & Accounts Payable