Free CAPA Accounts Payable Operations Questions and Answers

Question 1

The general ledger account Accounts Payable is a current __________ account.

Accepted Answer

liability

Answer

Explanation:
Accounts Payable represents the amount a company owes to its suppliers for goods and services received on credit. It is classified as a current liability because it is typically paid off within one year.

Question 2

A __________ balance is typical for Accounts Payable.

Accepted Answer

credit

Answer

Explanation:
Accounts Payable typically carry a credit balance because it represents money owed by the company to its suppliers. When a liability account such as Accounts Payable increases, it is recorded as a credit to reflect the increase in the company's obligation to pay.

Question 3

The balance in Accounts Payable is decreased with a __________ entry.

Accepted Answer

debit

Answer

Explanation:
To decrease the balance in the Accounts Payable account, a debit entry is made. This is because Accounts Payable is a liability account, and debiting a liability account decreases its balance. When a company pays off its debts to suppliers, it reduces the amount owed, resulting in a decrease in the Accounts Payable balance.

Question 4

Accounts payable are also known as __________ payables.

Accepted Answer

trade

Answer

Explanation:
Accounts payable are often referred to as trade payables because they represent obligations arising from the purchase of goods or services on credit in the normal course of business operations. These payables are typically short-term liabilities that are expected to be paid off within a short period, usually within one year.

Question 5

PO is the abbreviation for __________ __________.

Accepted Answer

Purchase Order

Answer

Explanation:
PO stands for Purchase Order, which is a document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services the seller will provide to the buyer. It serves as a legally binding contract between the buyer and the seller, outlining the details of the transaction.

CAPA - Certified Accounts Payable Associate Practice Test

CAPA - Certified Accounts Payable Associate Practice Test

Free CAPA Accounts Payable Operations Questions and Answers