Robert Half Assessment Test Accounts Payable and Receivable 3

Question 1

When a company receives a credit memo from a vendor, what is the correct accounting treatment?

Accepted Answer

Debit Accounts Payable, Credit Purchases Returns and Allowances (or the relevant expense account)

Answer

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?

Accepted Answer

To track the detailed balance owed to each individual vendor

Answer

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?

Accepted Answer

Posting a customer's check payment against their open invoice

Answer

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?

Accepted Answer

$12,000

Answer

$800,000 × 1.5% = $12,000 bad debt expense recorded for the period.

Question 5

What does 'net 30' mean on a vendor invoice?

Accepted Answer

Full payment is due within 30 days of the invoice date with no early-pay discount

Answer

Net 30 means the entire invoice balance is due within 30 days of the invoice date, with no early-payment discount offered.

Robert Half Assessment Test Practice Test

Robert Half Assessment Test Practice Test

Robert Half Assessment Test Accounts Payable and Receivable 3