SOP Financial SOP 2 — Questions and Answers
Question 1: What is the primary purpose of a financial SOP for accounts payable?
- To track employee vacation time
- To ensure invoices are processed accurately and on time (Correct answer)
- To manage customer complaints
- To set marketing budgets
Correct answer: To ensure invoices are processed accurately and on time
Accounts payable SOPs standardize the process of verifying, approving, and paying vendor invoices consistently and on schedule.
Question 2: A three-way match in accounts payable compares which three documents?
- Invoice, bank statement, and ledger
- Purchase order, receiving report, and vendor invoice (Correct answer)
- Budget, forecast, and actual spend
- Contract, proposal, and payment receipt
Correct answer: Purchase order, receiving report, and vendor invoice
A three-way match verifies that the purchase order, the goods receiving report, and the vendor invoice all agree before payment is authorized.
Question 3: Which control is most effective at preventing duplicate invoice payments?
- Requiring manager approval for all invoices
- Assigning unique invoice numbers and checking them against a payment log (Correct answer)
- Paying all invoices in cash
- Delaying all payments by 90 days
Correct answer: Assigning unique invoice numbers and checking them against a payment log
Logging unique invoice numbers and querying them before processing prevents the same invoice from being paid more than once.
Question 4: Under a financial SOP, who typically has authority to approve a capital expenditure exceeding $50,000?
- Any department manager
- The accounts payable clerk
- Senior leadership or the CFO, per the delegation of authority matrix (Correct answer)
- The vendor submitting the invoice
Correct answer: Senior leadership or the CFO, per the delegation of authority matrix
Delegation of authority matrices define approval thresholds, requiring higher-level sign-off for larger expenditures to maintain proper financial controls.
Question 5: What does 'net 30' mean in a vendor payment terms SOP?
- Payment is due 30 days before the invoice date
- Payment is due within 30 days of the invoice date (Correct answer)
- The vendor offers a 30% discount
- Payment must be made in 30 equal installments
Correct answer: Payment is due within 30 days of the invoice date
Net 30 is a standard trade credit term meaning the buyer must pay the full invoice balance within 30 calendar days of the invoice date.
Question 6: A financial SOP requires segregation of duties in accounts payable. What does this mean?
- One person handles all financial tasks for efficiency
- Different individuals are responsible for authorization, recording, and custody of assets (Correct answer)
- Departments keep their finances completely separate
- Financial records are stored in separate physical locations
Correct answer: Different individuals are responsible for authorization, recording, and custody of assets
Segregation of duties splits financial tasks among multiple people so no single employee can commit and conceal fraud or errors.
Question 7: When an invoice amount does not match the purchase order in a three-way match, what should the SOP require?
- Pay the invoice immediately to maintain vendor relations
- Place the invoice on hold and notify the purchasing department for resolution (Correct answer)
- Discard the invoice and re-order
- Approve the payment if the difference is under $1,000
Correct answer: Place the invoice on hold and notify the purchasing department for resolution
Discrepancies must be investigated and resolved before payment to avoid overpayments and ensure the organization is billed correctly.
SOP Financial SOP 2
What is the primary purpose of a financial SOP for accounts payable?