Robert Half Assessment Test Accounts Payable and Receivable 2 — Questions and Answers
Question 1: A vendor invoice dated June 1 has terms of 2/10, net 45. If payment is made on June 9, what discount applies?
- No discount applies because the grace period hasn't started
- 2% discount because payment is within 10 days (Correct answer)
- 45% discount for early payment
- 2% penalty for paying too early
Correct answer: 2% discount because payment is within 10 days
Terms 2/10 mean a 2% discount is available if payment is made within 10 days of the invoice date, and June 9 is 8 days after June 1.
Question 2: Which internal control best prevents duplicate payment of vendor invoices?
- Requiring two signatures on all checks
- Stamping invoices 'PAID' immediately upon receipt
- Matching each invoice to a unique purchase order and receiving report before payment (Correct answer)
- Filing all invoices alphabetically by vendor name
Correct answer: Matching each invoice to a unique purchase order and receiving report before payment
Three-way matching (invoice, purchase order, and receiving report) ensures each invoice is legitimate and unique before payment is processed.
Question 3: What does a debit balance in Accounts Payable typically indicate?
- The company owes more money to vendors
- An overpayment or vendor credit situation (Correct answer)
- Normal payable activity
- The account is fully reconciled
Correct answer: An overpayment or vendor credit situation
Accounts Payable normally carries a credit balance; a debit balance suggests the company overpaid a vendor or received a credit memo that has not been offset.
Question 4: A customer has a $5,000 balance with payment terms of net 30. On day 45, the customer has not paid. What is the FIRST step in the collections process?
- Immediately send the account to a collection agency
- Write off the balance as a bad debt
- Send a formal past-due notice or make a collection call (Correct answer)
- Apply a 20% penalty fee to the balance
Correct answer: Send a formal past-due notice or make a collection call
Standard AR collections practice begins with a past-due notice or direct contact to remind the customer and determine the reason for non-payment.
Question 5: What journal entry records the allowance method to recognize estimated bad debt expense?
- Debit Bad Debt Expense, Credit Accounts Receivable
- Debit Allowance for Doubtful Accounts, Credit Bad Debt Expense
- Debit Bad Debt Expense, Credit Allowance for Doubtful Accounts (Correct answer)
- Debit Accounts Receivable, Credit Bad Debt Expense
Correct answer: Debit Bad Debt Expense, Credit Allowance for Doubtful Accounts
Under the allowance method, Bad Debt Expense is debited and the contra-asset Allowance for Doubtful Accounts is credited to recognize estimated uncollectible amounts.
Question 6: Which document authorizes the AP department to release payment to a vendor?
- The vendor's sales catalog
- An approved payment voucher or check request (Correct answer)
- The company's bank statement
- A receiving report alone
Correct answer: An approved payment voucher or check request
An approved payment voucher (or check request) is the internal authorization document that triggers the AP department to issue payment.
Question 7: On an aging report, a receivable classified as '91–120 days past due' should be treated how, compared to a '1–30 days past due' balance?
- Assigned a lower estimated uncollectible percentage
- Assigned a higher estimated uncollectible percentage (Correct answer)
- Treated identically in allowance calculations
- Immediately written off with no allowance
Correct answer: Assigned a higher estimated uncollectible percentage
Older receivables have a statistically higher probability of non-collection, so aging analysis applies progressively higher uncollectible percentages to older buckets.
Robert Half Assessment Test Accounts Payable and Receivable 2
A vendor invoice dated June 1 has terms of 2/10, net 45.
If payment is made on June 9, what discount applies?