Robert Half Assessment Accounts Payable and Receivable Questions and Answers — Questions and Answers
Question 1: In accounts payable, the 'three-way match' is a critical internal control used before paying a vendor. Which three documents are compared in this process?
- Vendor Invoice, Bank Statement, and Company Budget
- Purchase Order, Receiving Report, and Vendor Invoice (Correct answer)
- Sales Order, Bill of Lading, and Customer Check
- W-9 Form, Vendor Contract, and Payment Voucher
Correct answer: Purchase Order, Receiving Report, and Vendor Invoice
The three-way match process involves comparing the Purchase Order (what was ordered), the Receiving Report (what was received), and the Vendor Invoice (what the company is being billed for) to ensure accuracy and legitimacy before issuing payment.
Question 2: A customer contacts the accounts receivable department stating they were overcharged on an invoice because a sales discount was not applied. What should be the clerk's FIRST course of action?
- Immediately issue a credit memo for the disputed amount to maintain customer satisfaction.
- Contact the sales department and instruct them to correct the error for future invoices.
- Verify the original sales order and contract terms to confirm the discount's applicability. (Correct answer)
- Inform the customer that all invoice amounts are final and must be paid as billed.
Correct answer: Verify the original sales order and contract terms to confirm the discount's applicability.
The first step in handling any invoice dispute is to investigate the claim's validity. The clerk must review the source documents, such as the sales order or contract, to determine if the customer was indeed entitled to the discount. Issuing a credit memo without verification is poor practice, and the other options are either premature or unprofessional.
Question 3: What is the primary purpose of preparing an Accounts Receivable Aging Report?
- To calculate the total sales revenue generated for the accounting period.
- To identify and prioritize overdue customer invoices for collection efforts. (Correct answer)
- To determine the amount of sales tax the company owes to the government.
- To list customers in order of who has been with the company the longest.
Correct answer: To identify and prioritize overdue customer invoices for collection efforts.
An Accounts Receivable Aging Report categorizes unpaid invoices by the length of time they are past due (e.g., 0-30 days, 31-60 days, 61-90+ days). Its main purpose is to help the collections team manage and prioritize efforts to collect from customers with overdue balances.
Question 4: A company receives an invoice for $10,000 with payment terms of '2/10, n/30'. If the company has sufficient cash flow, what is the most financially advantageous action to take?
- Pay $10,000 on the 25th day.
- Pay $9,800 on the 25th day.
- Pay $10,000 within the first 10 days.
- Pay $9,800 within the first 10 days. (Correct answer)
Correct answer: Pay $9,800 within the first 10 days.
The payment term '2/10, n/30' indicates that a 2% discount is available if the invoice is paid within 10 days; otherwise, the full (net) amount is due in 30 days. Taking the 2% discount on $10,000 results in a $200 savings, making the payment $9,800. This is the best financial option.
Question 5: When reconciling a vendor statement against the company's accounts payable records, a clerk notices a payment they recorded is not showing on the vendor's statement. What is the most common reason for this discrepancy?
- The vendor has intentionally omitted the payment.
- The company's bank has lost the payment transfer.
- The payment is in transit and has not yet been processed by the vendor. (Correct answer)
- A duplicate invoice was paid by mistake.
Correct answer: The payment is in transit and has not yet been processed by the vendor.
A common reconciling item is a 'payment in transit.' This occurs when a company has sent a payment near the end of the reporting period, but the vendor has not yet received or processed it by the time their statement is generated. This is a timing difference that usually resolves itself in the next period.
Question 6: The finance department wants to measure the average number of days it takes for the company to collect payments from its customers after a sale is made. Which key performance indicator (KPI) should they calculate?
- Current Ratio
- Accounts Payable Turnover
- Days Sales Outstanding (DSO) (Correct answer)
- Return on Equity (ROE)
Correct answer: Days Sales Outstanding (DSO)
Days Sales Outstanding (DSO) is the financial metric used to measure the average number of days a company takes to collect its accounts receivable after a sale. A lower DSO indicates a company collects its receivables more quickly. The other options measure liquidity, payment efficiency to suppliers, and profitability, respectively.
Robert Half Assessment Accounts Payable and Receivable Questions and Answers
In accounts payable, the 'three-way match' is a critical internal control used before paying a vendor.
Which three documents are compared in this process?