FREE CPB Accounts Payable & Receivable Management Questions and Answers

Question 1

What is the main purpose of accounts payable?

Accepted Answer

Tracking money owed to suppliers

Answer

Accounts payable represents the short-term debts a company owes to its suppliers for goods or services purchased on credit. It is a liability account on the balance sheet, reflecting the company's obligation to pay these vendors in the near future.

Question 2

What is an invoice?

Accepted Answer

A request for payment

Answer

An invoice is a commercial document issued by a seller to a buyer, detailing the goods or services provided, the quantity, and the agreed-upon prices. It serves as a formal request for payment for those goods or services, initiating the payment process for the buyer.

Question 3

Which document authorizes a company to pay a supplier?

Accepted Answer

Purchase order

Answer

A purchase order (PO) is a commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services. It serves as an official authorization for the supplier to provide the specified goods or services, committing the buyer to pay upon fulfillment.

Question 4

What is accounts receivable?

Accepted Answer

Money owed to the company

Answer

Accounts receivable represents the money that customers owe to a company for goods or services that have been delivered or rendered on credit. It is an asset on the balance sheet, reflecting the company's right to collect payment in the future.

Question 5

What is the effect of late payment on accounts payable?

Accepted Answer

Damages supplier relationships

Answer

Paying accounts payable late can strain relationships with suppliers, potentially leading to less favorable terms, delayed shipments, or even refusal to do business in the future. Maintaining good payment habits is crucial for fostering strong, reliable supplier partnerships and ensuring continued supply chain efficiency.

CPB - Certified Public Bookkeeper Practice Test

CPB - Certified Public Bookkeeper Practice Test

FREE CPB Accounts Payable & Receivable Management Questions and Answers