Accounts Payable

What is the primary function of accounts payable in a business?

• To manage employee salaries

• To track customer orders

• To handle outgoing payments to suppliers

• To oversee marketing strategies

Which document is typically used to verify the accuracy of an accounts payable transaction?

• Invoice

• Receipt

• Purchase Order

• Sales Order

In the context of accounts payable, what does the term 'creditor' refer to?

• A customer who buys goods

• A supplier to whom money is owed

• An employee who receives a salary

• A shareholder in the company

How does accounts payable impact a company's cash flow?

• It increases cash flow by delaying payments

• It decreases cash flow by requiring immediate payments

• It has no impact on cash flow

• It stabilizes cash flow by managing payment schedules

What is the typical effect of an increase in accounts payable on a company's balance sheet?

• Increase in assets

• Decrease in liabilities

• Increase in liabilities

• Decrease in equity

Which of the following is a common strategy for managing accounts payable effectively?

• Paying all bills immediately

• Negotiating longer payment terms with suppliers

• Ignoring invoices until due

• Paying suppliers in cash only

What role does technology play in modern accounts payable processes?

• It complicates the process

• It automates and streamlines the process

• It eliminates the need for human oversight

• It has no role in accounts payable

Why is it important for a company to maintain accurate accounts payable records?

• To ensure timely tax payments

• To prevent fraud and errors

• To increase sales

• To attract more customers

What is a common consequence of failing to manage accounts payable properly?

• Increased customer satisfaction

• Improved supplier relationships

• Financial penalties and damaged credit

• Higher employee morale

Which of the following best describes the accounts payable turnover ratio?

• A measure of how quickly a company pays off its suppliers

• A measure of employee productivity

• A measure of customer satisfaction

• A measure of inventory turnover