Accounts Payable Test
Streamlined
Sales Tax is a national effort by which of the following?
a. The
State Government
b. The
Local Government
c. The
private sector to simplify and modernize sales and use tax collection
d. All
of the above
In
its 2007 income statement, Cere & Co. has reported an income of $300,000
before income taxes. Cere estimated that, because of permanent differences,
taxable income for 2007 would be $280,000. During 2007, Cere made estimated tax
payments of $50,000, which were debited to income tax expense; Cere is subject
to a 30% tax rate. What amount should Cere report as income tax expense?
a. $34,000
b. $50,000
c. $84,000
d. $90,000
Why
would a company choose to invoice weekly rather than monthly?
a. It
increases cash flow
b. It
creates constant work for the accounts receivable staff
c. It
is legally required
d. Customers
enjoy receiving invoices
Accrual
Basis means __________.
a. the
most commonly used accounting method which reports income when earned and
expenses when incurred,
b. the
accounting method which reports income when received and expenses when paid.
c. the
accounting method which reports income when earned and expenses when incurred.
d. All
of the above
Excess
payment made to the supplier will appear as a _____.
a. debit
balance in the supplier's account.
b. credit
balance in the supplier's account.
c. debit
balance in the customer's account
d. credit
balance in the customer's account.
Receipts
from cash sales of $7,500 were recorded incorrectly as $5,700. What entry is
required in the depositor's accounts?
a. Debit
Cash: Credit Accounts Receivable
b. Debit
Sales: Credit Cash
c. Debit
Accounts Receivable: Credit Cash
d. Debit
Cash: Credit Cash Sales
If
a prepaid expense is expiring (the final month is expensed), and the company
has not received an invoice for the upcoming prepaid period, the accounting
should:
a. Continue
to book the monthly expense in the upcoming month and contact the company to
find if an invoice will be issued for the coming year
b. Do
not book the monthly expense and assume your company is no longer in business
with the company
c. Send
an email to the CFO
d. Delete
the line from Excel and assume no further expense
When
an invoice is presented for payment, most companies match it against a purchase
order and a receiving document, and if all three match, the invoice is paid on
or after its due date. This is referred to as ---------------- .
a. the
two-way match
b. the
three-way match
c. invoice
cleared
d. invoice
paid
Lime
& Co.'s payroll for the month ended January 31,2007 is summarized as
follows: Total wages $10000 Federal income tax withheld $1200 All wages paid
were subject to FICA. FICA tax rates were 7% each for the employees and the
employer. The company remits payroll taxes on the 15th of the following month.
In its financial statements for the month ended January 31, 2007, what amounts
should it report as total payroll tax liability and as payroll tax expense?
a. $1200
$1400
b. $1900
$1400
c. $1900
$700
d. $2600
$700
A
firm makes all its purchases on credit basis. Cash payment on trade credit is
required in the month following the purchase on 70% of all the purchases. The
firm takes a 2% cash discount and makes payment for the remaining 30% of all
the purchases in the month of purchase.The forecasted purchases for January
through April are worth $300,000, $375,000, $450,000, and $300,000
respectively. What will be the total cash disbursement for purchases in the
month of March?
a. $132,300
b. $394,800
c. $403,200
d. $450,000
On
December 31, 2007, Deal Inc. failed to accrue the December 2007 sales salaries
that were payable on January 6,2008. What will be the effect of the failure to
accrue sales salaries on the working capital and cash flows from operating
activities in Deal's 2007 financial statements?
Working
Capital Cash Flows from Operating Activities
a. Overstated
No effect
b. Overstated
Overstated
c. No
effect Overstated
d. No
effect No effect
Payments
for expenses incurred on corporate cards should be made directly to_____.
a. the
EFT
b. the
IRS
c. the
state Taxes
d. the
credit card company
How
will you track the deposits that clients pay to the vendors?
a. Track
deposits as negative balances in Accounts Payable
b. Record
the deposit in the Enter Bills window
c. Neither
of the above
Who
are the parties to a bill of exchange?
a. The
drawers & the payees
b. The
payees & the owners
c. The
drawers, the drawees & the payees
d. The
owners & the drawers
The
Provisions of SFAS 109, Accounting for Income Taxes, are applicable to:
a. all
foreign, state, and local taxes.
b. domestic
Federal income taxes.
c. an
enterprise's foreign operations accounted for by the cost method.
d. financial
statements of foreign enterprises required to pay US. Federal income taxes.
Who
can use a company's Travel & Entertainment Cards, though the liability lies
with the employees?
a. Vendors
b. Customers
c. Employees
d. All
of the above
What
type of people does the Accounts Payable interface with most often?
a. Customers
b. Vendors
c. Other
employees
d. IRS
What
is the report generated to find the net purchases from each vendor regardless
of how payments were recorded called?
a. Inventory
valuation summary
b. Expenses
by vendor summary
c. Unpaid
bills details
d. Purchases
by vendor summary
At
what stage in the Accounts Payable process is cash affected?
a. When
an invoice is entered into the accounting system
b. When
a credit memo is generated
c. When
checks are printed
d. Accounts
Payable never handles cash
The
correct journal entry to record a purchase of inventory on credit using a
perpetual inventory system includes:
a. debit
Cost of Goods Sold, credit Inventory
b. debit
Accounts Payable, credit Inventory
c. debit
Accounts Receivable, credit Sales Revenue
d. debit
Inventory, credit Accounts Payable
Under
the state law, Acme may pay 3% of eligible gross wages or it may reimburse the
state directly for actual unemployment claims. The Company believes that actual
unemployment claims will be 2% of the eligible gross wages and has chosen to
reimburse the state. Eligible gross wages are defined as the first $10000 of
the gross wages paid to each employee. The Company had five employees, each of
whom earned $20000 during 2007. In its December 31, 2007 balance sheet, what
amount should it report as accrued liability for unemployment claims?
a. $1000
b. $1500
c. $2000
d. $3000
Hudson
Hotels collects 15 % as city sales tax on room rentals, in addition to $2 per
room, per night, as occupancy tax. Sales tax for each month is due at the end
of the following month, and occupancy tax are due 15 days after the end of each
calendar quarter. On January 3, 2008, Hudson paid its November 2007 sales tax
and occupancy tax for the fourth quarter of 2007. Additional information pertaining
to Hudson's operations is as follows:
2007
Room Rentals Room Nights
October
$100,000 $1,100
November
$110,000 $1,200
December
$150,000 $1,800
What
amounts should Hudson report as sales tax payable and occupancy tax payable in
its December 31, 2007 balance sheet?
Sales
Tax Occupancy Taxes
a. $39,000
$6,000
b. $39,000
$8,200
c. $54,000
$6,000
d. $54,000
$8,200
Accounts
Payable affect net income.
a. True
b. False
Why
do companies require deposits & advances?
a. They
don't trust the customers to pay
b. It
improves cash flow, especially for long duration projects
c. They
want to make sure customers have money to pay
What
level of detail should invoices contain?
a. Summary,
only the total due
b. Totals
by item
c. Totals
by date
d. Specific
details - dates, quantities, individual pricing
Which
of the following methods can be used to value inventory in QuickBooks?
a. Double
declining balance
b. Last
in, first out (LIFO)
c. First
in, first out (FIFO)
d. Average
cost
Accounts
payable refer to the current _________.
a. income
of a business or an organization
b. assets
of a business or an organization
c. expenses
of a business or an organization
d. liabilities
of a business or an organization
Accompanying
the bank statement was a credit memorandum for a short-term,
non-interest-bearing note collected by the bank. What entry is required in the
depositor's accounts?
a. Debit
Accounts Receivable: Credit Cash
b. Debit
Cash: Credit Notes Receivable
c. Debit
Cash: Credit Miscellaneous Income
d. Debit
Notes Receivable:Credit Cash
Where
do you record the payment terms for the money that a client owes to a vendor?
a. In
Sales Orders
b. In
Checks
c. In
Purchase Orders
d. In
Bills
Which
form is used to reimburse an individual for Travel and Entertainment expenses?
a. Form
W4
b. Expense
Voucher
c. Form
1099Misc
d. Form
941
What
steps are taken before approving an invoice for payment?
a. Validating
the invoice once it is matched for checking
b. If
workflow is implemented, initiating approval for the invoice
c. Creating
accounting after approval of invoice
d. Both
a and b
e. a,
b, and c
A
bill is a form on which you record details of _________ .
a. the
sales made
b. the
expenses incurred
c. a
purchase made by a vendor to whom the Company owe money
d. the
income accrued
From
the Accounts Payable point of view, what are the main problems that arise
between Accounts Payable and Purchasing?
a. Missing
information on Purchase Orders
b. Missing
information about discounts
c. Delays
d. All
of the above.
What
is the last date for filing claims for VAT refunds in all countries?
a. December
31st of every year
b. January
31st of every year
c. There
is no deadline for filing claims for VAT refunds
d. June
30th of every year
Who
typically calculates the tax liability to be paid?
a. The
State government, which informs the company what is owed
b. The
Accounts Payable staff
c. The
CFO
d. The
General or Tax Accountant within the company
When
are invoices treated as having been paid short?
a. If
any discount for early payment is allowed
b. If
there are any damaged goods
c. If
there are any prior credits
d. All
of the above.
Companies
accrue expenses in order to comply with which accounting principle?
a. Timeliness
b. Matching
c. Conservatism
d. Magnitude
What
is the difference between Accounts Payable and Accounts Receivable?
a. Accounts
receivable are amounts owed by the suppliers on account whereas the Accounts
Payable are amounts owed to the customers on account.
b. Accounts
receivable are amounts owed by the customers on account whereas the Accounts
Payable are amounts owed to the suppliers on account.
c. Accounts
receivable are amounts owed by the customers on account whereas the Accounts
Payable are amounts owed to the bankers on account.
d. None
of the above
Debit
memos are required for_______.
a. the
payment deductions taken on invoices.
b. the
payments made on Purchase Orders
c. the
payments received on Sales Orders
d. Both
b and c
What
is the Journal Entry for "The Company purchased $6,000 worth of
merchandise on credit"?
a. Dr
Accounts Payable and Cr Merchandise
b. Dr
Merchandise and Cr Accounts Payable
c. Dr
Bank and Cr Accounts Payable
d. None
of the above