CB CB Accounts Receivable and Payable Management

Question 1

Which ledger records amounts owed TO your business by customers?

Accepted Answer

Accounts receivable ledger

Answer

The accounts receivable ledger tracks money customers owe to the business for goods or services delivered on credit.

Question 2

An aging report categorizes outstanding receivables by:

Accepted Answer

How long invoices have been outstanding

Answer

An aging report groups unpaid invoices into time buckets (0–30, 31–60, 61–90, 90+ days) to identify overdue accounts.

Question 3

When a customer pays their invoice, the bookkeeper debits Cash and credits:

Accepted Answer

Accounts Receivable

Answer

Receiving a customer payment reduces the receivable balance, so Accounts Receivable is credited and Cash is debited.

Question 4

A credit memo issued to a customer typically results in:

Accepted Answer

A decrease in accounts receivable

Answer

A credit memo reduces the amount the customer owes, thereby decreasing the accounts receivable balance.

Question 5

The allowance method of accounting for bad debts is preferred over the direct write-off method because it:

Accepted Answer

Matches bad debt expense to the period the sale occurred

Answer

The allowance method recognizes estimated bad debts in the same period as the related revenue, following the matching principle.

(CB) Certified Bookkeeper Practice Test