FAC Accounts Receivable & Accounts Payable Management 2

Question 1

The primary purpose of a three-way match in accounts payable is to:

Accepted Answer

Verify that the purchase order, receiving report, and vendor invoice agree before payment

Answer

A three-way match compares the purchase order, receiving report, and vendor invoice to ensure quantities, prices, and terms are consistent before authorizing payment.

Question 2

The payment term '2/10, net 30' means the buyer:

Accepted Answer

May take a 2% discount if paid within 10 days; otherwise the full amount is due in 30 days

Answer

2/10, net 30 offers a 2% discount as an incentive for early payment within 10 days; if not taken, the full invoice amount is due within 30 days.

Question 3

Which document in the AP process formally authorizes the disbursement of funds to a vendor?

Accepted Answer

Payment voucher (voucher package)

Answer

A payment voucher or voucher package bundles the supporting documents (PO, receiving report, invoice) and serves as the internal authorization for issuing payment.

Question 4

An accrued liability in accounts payable represents:

Accepted Answer

Goods or services received but for which no invoice has yet been received

Answer

An accrued liability (accrued AP) is recorded when the company has received the benefit of goods or services but has not yet received the vendor's invoice at period-end.

Question 5

The accounts payable turnover ratio measures:

Accepted Answer

How many times a company pays off its average accounts payable balance per period

Answer

AP turnover ratio equals total purchases divided by average accounts payable, indicating how frequently the company pays its suppliers during a period.

(FAC) Finance and Accounting Certification Practice Test

(FAC) Finance and Accounting Certification Practice Test

FAC Accounts Receivable & Accounts Payable Management 2