Robert Half Assessment Test Accounts Payable and Receivable 3 — Questions and Answers
Question 1: When a company receives a credit memo from a vendor, what is the correct accounting treatment?
- Debit Cash, Credit Accounts Payable
- Debit Accounts Payable, Credit Purchases Returns and Allowances (or the relevant expense account) (Correct answer)
- Debit Accounts Receivable, Credit Revenue
- Debit Expense, Credit Cash
Correct answer: Debit Accounts Payable, Credit Purchases Returns and Allowances (or the relevant expense account)
A vendor credit memo reduces the amount owed to that vendor, so Accounts Payable is debited and the purchase returns/expense account is credited.
Question 2: What is the purpose of an AP subledger?
- To record all company-wide journal entries
- To track the detailed balance owed to each individual vendor (Correct answer)
- To reconcile the company's bank account monthly
- To calculate depreciation on fixed assets
Correct answer: To track the detailed balance owed to each individual vendor
The AP subledger maintains a separate balance for each vendor, and the total of all subledger balances must agree with the AP control account in the general ledger.
Question 3: Which of the following is an example of a cash application in accounts receivable?
- Sending a new invoice to a customer
- Posting a customer's check payment against their open invoice (Correct answer)
- Writing off an uncollectible account
- Issuing a credit memo for a returned product
Correct answer: Posting a customer's check payment against their open invoice
Cash application is the process of matching and posting incoming customer payments to the correct open invoices in the AR system.
Question 4: A company uses the percent-of-sales method for estimating bad debts. If credit sales are $800,000 and the historical bad debt rate is 1.5%, what is the bad debt expense?
- $8,000
- $12,000 (Correct answer)
- $15,000
- $1,200
Correct answer: $12,000
$800,000 × 1.5% = $12,000 bad debt expense recorded for the period.
Question 5: What does 'net 30' mean on a vendor invoice?
- A 30% discount if paid within 30 days
- Full payment is due within 30 days of the invoice date with no early-pay discount (Correct answer)
- 30 days of free credit before interest accrues daily
- The vendor will accept 30 payments in installments
Correct answer: Full payment is due within 30 days of the invoice date with no early-pay discount
Net 30 means the entire invoice balance is due within 30 days of the invoice date, with no early-payment discount offered.
Question 6: Which report is MOST useful for prioritizing daily collection calls in AR?
- The income statement
- The accounts receivable aging report (Correct answer)
- The vendor ledger
- The cash flow forecast
Correct answer: The accounts receivable aging report
The AR aging report categorizes outstanding customer balances by how long they are past due, helping collectors focus on the oldest and largest overdue accounts first.
Question 7: What is 'float' in the context of accounts payable check disbursements?
- The difference between the invoice amount and the discounted payment amount
- The time between when a check is written and when it clears the company's bank account (Correct answer)
- A penalty fee charged by vendors for late payment
- The balance remaining in petty cash
Correct answer: The time between when a check is written and when it clears the company's bank account
Float is the period between check issuance and bank clearance, during which the company retains use of the cash and the bank balance has not yet decreased.
Robert Half Assessment Test Accounts Payable and Receivable 3
When a company receives a credit memo from a vendor, what is the correct accounting treatment?