Robert Half Assessment Test Accounts Payable and Receivable 4

Question 1

A company writes off a customer's $2,000 receivable using the allowance method. Which journal entry is correct?

Accepted Answer

Debit Allowance for Doubtful Accounts $2,000, Credit Accounts Receivable $2,000

Answer

Debit Bad Debt Expense $2,000, Credit Accounts Receivable $2,000

Answer

Debit Accounts Receivable $2,000, Credit Allowance for Doubtful Accounts $2,000

Answer

Debit Cash $2,000, Credit Accounts Receivable $2,000

Question 2

Which term describes the practice of selling a company's accounts receivable to a third party at a discount?

Accepted Answer

Factoring

Answer

Pledging

Answer

Discounting payables

Answer

Securitization swap

Question 3

During an AP reconciliation, you notice an invoice was posted twice for the same vendor. What is the BEST corrective action?

Accepted Answer

Void one of the duplicate invoice entries and adjust the vendor's balance accordingly

Answer

Pay both invoices and request a refund later

Answer

Leave both entries and note it in the reconciliation memo

Answer

Write off one entry as a miscellaneous expense

Question 4

What is the Days Payable Outstanding (DPO) formula?

Accepted Answer

(Accounts Payable / Cost of Goods Sold) × 365

Answer

(Cost of Goods Sold / Accounts Payable) × 365

Answer

(Accounts Receivable / Revenue) × 365

Answer

(Revenue / Accounts Payable) × 365

Question 5

A customer previously written off pays $500. Using the allowance method, what is the FIRST step to record this recovery?

Accepted Answer

Reinstate the receivable by debiting Accounts Receivable and crediting Allowance for Doubtful Accounts

Answer

Debit Cash, Credit Bad Debt Expense directly

Answer

Debit Cash, Credit Revenue

Answer

Credit Accounts Payable for the recovered amount

Question 6

What is the key difference between a purchase order and a vendor invoice?

Accepted Answer

A purchase order is issued by the buyer to authorize a purchase; an invoice is the vendor's demand for payment

Answer

A purchase order is issued by the vendor; an invoice is issued by the buyer

Answer

Both are issued by the vendor but at different times

Answer

A purchase order records payment; an invoice records the order

Question 7

Which metric measures how efficiently a company collects its receivables?

Accepted Answer

Days Sales Outstanding (DSO)

Answer

Days Payable Outstanding (DPO)

Answer

Current Ratio

Answer

Gross Margin Percentage