Financial Management for Project Managers Accounts Payable/Receivable 2

Question 1

A vendor invoice arrives with a 2/10 net 30 payment term. What does this mean for the project manager?

Accepted Answer

Get a 2% discount if paid within 10 days, otherwise full amount due in 30 days

Answer

Pay within 30 days to get a 2% discount

Answer

Pay 2% interest if not paid within 10 days

Answer

Pay within 2 days or face a 10% penalty

Question 2

Which aging bucket in an accounts receivable aging report typically signals the highest collection risk?

Accepted Answer

91+ days

Answer

0-30 days

Answer

31-60 days

Answer

61-90 days

Question 3

A project team receives goods worth $50,000 but the vendor invoice has not yet arrived. How should this be recorded?

Accepted Answer

Debit expense, credit accrued liabilities

Answer

No entry until the invoice arrives

Answer

Debit prepaid expense, credit cash

Answer

Debit accounts payable, credit revenue

Question 4

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

Accepted Answer

To authorize a purchase and document the agreed terms before goods are received

Answer

To record payment to the vendor

Answer

To reconcile the vendor's statement

Answer

To request a refund from a vendor

Question 5

A project manager notices the accounts receivable turnover ratio has declined over two quarters. What does this most likely indicate?

Accepted Answer

Customers are taking longer to pay, indicating collection issues

Answer

Customers are paying faster

Answer

The project is generating more revenue

Answer

The company has reduced its credit sales

Question 6

What document is used in a three-way match process to verify an accounts payable invoice?

Accepted Answer

Purchase order, receiving report, and vendor invoice

Answer

Budget report, vendor invoice, and bank statement

Answer

Contract, change order, and payment request

Answer

Timesheet, expense report, and vendor invoice

Question 7

Which metric helps a project manager understand how efficiently the project is paying its vendors?

Accepted Answer

Days payable outstanding (DPO)

Answer

Accounts receivable turnover

Answer

Net profit margin

Answer

Current ratio