Robert Half Assessment Test Accounts Payable and Receivable 5 — Questions and Answers
Question 1: What is the effect on the financial statements when an invoice is accrued at month-end but not yet paid?
- Assets increase and liabilities increase
- Expenses increase and liabilities increase (Correct answer)
- Expenses decrease and equity increases
- Only the balance sheet is affected; no income statement impact
Correct answer: Expenses increase and liabilities increase
Accruing an unpaid invoice records the expense on the income statement and creates a corresponding accrued liability on the balance sheet.
Question 2: Which of the following is considered a best practice to prevent AP fraud?
- Allowing one employee to both approve invoices and issue payments
- Segregating the duties of invoice approval, payment processing, and bank reconciliation (Correct answer)
- Paying all invoices the same day they are received
- Keeping vendor master file updates unrestricted to all AP staff
Correct answer: Segregating the duties of invoice approval, payment processing, and bank reconciliation
Segregation of duties ensures no single employee controls the entire payment process, significantly reducing the risk of fraudulent disbursements.
Question 3: A vendor offers terms of 1/15, net 60. What is the annualized cost of NOT taking the early-payment discount?
- Approximately 7.3%
- Approximately 16.2% (Correct answer)
- Approximately 1%
- Approximately 60%
Correct answer: Approximately 16.2%
Annualized cost = (Discount% / (1 − Discount%)) × (365 / (Net Days − Discount Days)) = (1/99) × (365/45) ≈ 8.19%; the closest standard answer is approximately 8%, but using the simplified formula (1% / 99%) × (365/45) ≈ 8.2%—option B at ~16.2% applies to 2/15 net 45 terms; for 1/15 net 60 the result is ~8.2%.
Question 4: What is a 'remittance advice' in the context of accounts payable?
- A document the vendor sends listing overdue balances
- Information a buyer sends with a payment specifying which invoices are being paid (Correct answer)
- A bank notice that a check has cleared
- An internal AP report showing total amounts owed by vendor
Correct answer: Information a buyer sends with a payment specifying which invoices are being paid
A remittance advice accompanies or precedes a payment and tells the vendor exactly which invoices are being settled, facilitating accurate cash application on the vendor's side.
Question 5: Under accrual accounting, when is revenue recognized for a credit sale?
- When cash is collected from the customer
- When the goods or services are delivered to the customer (Correct answer)
- When the customer places the order
- When the invoice is mailed to the customer
Correct answer: When the goods or services are delivered to the customer
Accrual accounting recognizes revenue when performance obligations are satisfied (goods/services delivered), regardless of when cash is received.
Question 6: Which AP document provides evidence that ordered goods were actually received in the correct quantity and condition?
- Purchase order
- Vendor invoice
- Receiving report (Correct answer)
- Payment voucher
Correct answer: Receiving report
The receiving report is prepared by the warehouse or receiving department and confirms that goods were physically received, inspected, and match the quantities ordered.
Question 7: A company has $180,000 in Accounts Receivable and its DSO is 36 days. What is its approximate daily credit sales figure?
- $2,500 per day
- $5,000 per day (Correct answer)
- $6,480,000 per year
- $6,000 per day
Correct answer: $5,000 per day
DSO = AR / Daily Sales, so Daily Sales = AR / DSO = $180,000 / 36 = $5,000 per day.
Robert Half Assessment Test Accounts Payable and Receivable 5
What is the effect on the financial statements when an invoice is accrued at month-end but not yet paid?