Accounts Payable MCQs

Accounts Payable MCQs

The following Accounts Payable MCQs have been compiled by our experts through research, in order to test your knowledge of the subject of Accounts Payable. We encourage you to answer these multiple-choice questions to assess your proficiency.
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1: Per annum means which of the following?

A.   Per year

B.   Per decade

C.   Per month

D.   Per day

2: What would be considered a rushed check?

A.   A check that is produced quickly

B.   A check that is cashed quickly

C.   A check produced outside the normal production cycle

D.   A check that is produced at a normal rate

3: What aspect is most important about the relationship between purchasing and accounts payable?

A.   Cooperation

B.   Competition

C.   Passive-aggressive behavior

D.   Acrimony

4: Current liablities are usually due within what period of time?

A.   Depends of the agreement

B.   2 years

C.   1 year

D.   6 months

5: What are procurement cards used for?

A.   They are used to take record of late payments

B.   They are cards that purchasers can trade in lieu of cash

C.   They are used for the purposes of smooth tax payment

D.   They are similar to credit cards, issued only for the purpose of procurement

6: When are long term liabilites typically due?

A.   More than 1 year

B.   More than 1 month

C.   More than 2 years

D.   More than 6 months

7: What can happen if an invoice is lost?

A.   It can be sent to another company

B.   Extra items appear from the vender

C.   It can be duplicated

D.   Nothing can happen since a lost invoice is of little importance

8: A reduced price for a certain product is called which of the following?

A.   product slash

B.   trade discount

C.   cost of a good

9: True or False? A vendor invoice is sent from a vendor to a company for some services or goods rendered.

A.   False

B.   True

10: What is the definition of a purchase order?

A.   (None of these)

B.   A document prepared by a company to show what exactly the company is selling to a supplier

C.   A document prepared by a company to show what exactly the company is ordering from a supplier

11: What is the definition of accounts payable?

A.   The money from a business that it owed and is shown on the balance sheet as an asset.

B.   (None of these)

C.   The money from a business that it owes and is shown on the balance sheet as a liability.

12: True or False? The account payable for one company corresponds to another company's account receivable.

A.   True

B.   False

13: PO is the abbreviation for __________

A.   point of order

B.   purchase order

14: Which of the following are accounts payable in a household?

A.   (All of these)

B.   Magazine subscription

C.   Cable bill

D.   Power bill

15: Which of the following is true about a voucher used in accounts payable?

A.   Can be used for travel

B.   Can be used housing

C.   (All of these)

D.   Can be used for food

16: What three documents are important when implementing controls to reduce duplicate payments?

A.   Vendor's invoice, purchase order, and receiving report

B.   Vendor's invoice, dinner order, and business report

C.   Buyer's invoice, item order, and shipping report

D.   Vendor's packing slip, purchase order, and agent report

17: What is an invoice?

A.   A sale

B.   An invoice is a bill

C.   An order

D.   A note

18: In the context of accounts payable, what is Net 30?

A.   The amount of days buyers are given to try an item

B.   Net 30 is trade credit specifying 30 days to be paid

C.   The amount of days on an item warranty

D.   A 30-day money back guarantee

19: True or False? A receiving report is essentially a document from a company that lists the goods it has received.

A.   True

B.   False

20: True or False? ePayables are often used as automation solutions for large firms.

A.   True

B.   False

21: Suppliers are also referred to as __________.

A.   vendors

B.   debtors

22: What role does technology serve in the auditing of accounts payable?

A.   Because invoices, expense reports, checks, and other supporting documents are digitized, the auditing process is simpler and more concise.

B.   It makes the auditing process easier because all forms can be sent directly to the government.

C.   Technology allows accounts payable work to be shifted to managers.

D.   Technology allows a company to outsource its accounts payable to competitors.

23: Why is automation of accounts payables a significant technological landmark?

A.   Automation means that no employees are needed for accounts payable.

B.   It can significantly reduce the amount of paper invoices.

C.   Automation means that there is no need for an accounting department.

24: If your company is offering your customers a 2/10 net 30 discount, what does this mean?

A.   It means that if the bill is paid in 10 weeks, the company receives a 2 percent discount for life

B.   It means that if the bill is paid in 10 hours, a 2 percent discount is given

C.   It means that if the bill is paid in 10 days, a 2 percent discount is given

D.   It means that if the bill is paid in 100 days, a 20 percent discount is given

25: True of False? For a specific company, an invoice is usually used externally and a voucher is used internally.

A.   True

B.   False

26: A company that pays 10% less by paying back what it is owed in a shorter time frame is called what?

A.   Liability discount

B.   Early payment discount

C.   Credit savings

D.   blank check discount

27: If AP pays from a statement, what potential result could occur?

A.   Theft

B.   A duplicate payment

C.   Embezzlement

D.   Fraud

28: True of False? A blank check is usually a check that is signed by an employer but lacks any more details like the amount, date, and payee.

A.   False

B.   True

29: Which of the following are one of the steps in a Standard Monthly Accounting Closing Cycle?

A.   Reporting

B.   Establish a Closing Date

C.   (All of these)

D.   Adjusting Entries

30: What is another term for a supplier?

A.   (None of these)

B.   Vendor

C.   Distributor

31: True or False? A balance sheet has the amount owed to creditors in two groups, namely current liabilities and long-term liabilities.

A.   False

B.   True

32: If a paycheck was automatically deposited, what was used to make said transaction?

A.   An Automated Teller Machine

B.   A mail carrying service

C.   An Automated Clearing House (ACH)

D.   The IRS

33: What is the definition of working capital?

A.   Current assets divided by current liabilities

B.   Current liabilities divided by current assets

C.   Current liabilities minus current assets

D.   Current assets minus current liablities

34: True or False? Accounts payables are only limited to businesses.

A.   True

B.   False

35: Which of the following is an example of a creditor?

A.   A vendor

B.   A person

C.   A Supplier

D.   (All of these)

36: Accounts payable information is found reviewing the which of the following?

A.   Purchase orders issued by the company

B.   (All of these)

C.   Invoices from the company's suppliers

D.   Contracts and other agreements

37: True of False? A trade discount cannot vary between various wholesalers.

A.   True

B.   False

38: How should AP deal with check kiting?

A.   Only accept checks for more than the amount of the transaction

B.   Only accept checks for the exact amount of the transaction

C.   Accept blank checks

D.   Don't accept any checks

39: What does the acronym, “EDI” mean?

A.   Experimental Data Interface

B.   Executive Data Interface

C.   External Data Interface

D.   Electronic Data Interchange

40: Which of the following is a common problem with invoices?

A.   The invoice doesn't get paid

B.   Customers receive the wrong products

C.   The invoice is not addressed properly, which causes a delay in payment

D.   The invoice is stolen

41: Why is the purchasing department critical to accounts payable?

A.   The purchasing department is not important to accounts payable

B.   The purchasing department is responsible for paying accounts payables salaries

C.   The purchasing department sets the agreements made with a companies vendors

D.   The purchasing department handles the accounting in accounts payable

42: If a trade discount of 20% is given to a wholesale customer with a total of x dollars of goods originally purchased, what is the final price the customer pays?

A.   0.9x

B.   0.2x

C.   x

D.   x-0.2x

43: What three documents are included in a three-way match?

A.   Expense Report, Invoice, and Balance Sheet

B.   Balance sheet, Income Statement, and Cash flows

C.   1099, W4, and Inventory report

D.   Seller's invoice, Total Bill, and Contracting agreement

E.   Vendor's invoice, Purchase order, and Receiving order

44: The balance in Accounts Payable is decreased with a __________ entry.

A.   credit

B.   debit

45: What is a secured creditor?

A.   (None of these)

B.   A creditor that has a legal right to the company's assets

C.   A creditor that has a legal right to the company's liabilities

46: If a requester insists on a rushed check to cover a mishap, what is the best method to handle this situation?

A.   Honor the rushed check and forget about it

B.   Put the rushed check aside with hopes that the requester will forget about it

C.   With managerial support, deny the rushed check

D.   Hide the check somewhere in the building

47: What is a benefit of using a procurement card?

A.   Procurement cards are used to identify those working in procurement

B.   Procurement cards are a means to obtain free items

C.   Procurement cards allow businesses to buy more than they can afford

D.   Procurement cards reduce the amount of time and paperwork in procurement

48: What are payment gateways used for?

A.   An on-line service authorizing credit card payments

B.   They are used to block all credit card payments

C.   They are a gateway to prevent credit card purchases of any kind

D.   They are accounts that managers can use to purchase goods and services

49: What is the definition of a company's current ratio?

A.   Current assets divided by current liablities

B.   Current assets minus current liablities

C.   Current liabilities minus current assets

D.   Current liabilities divided by current assets

50: What is a risk of the purchasing department not granting a rush check?

A.   They risk being put on credit hold by valued suppliers

B.   They risk government intervention

C.   They risk being granted excessive credit by valued suppliers

D.   They risk being sued by valued suppliers