Accounts Receivable MCQs
Accounts Receivable MCQs
These Accounts Receivable multiple-choice questions and their answers will help you strengthen your grip on the subject of Accounts Receivable. You can prepare for an upcoming exam or job interview with these Accounts Receivable MCQs.
So scroll down and start answering.
1: After goods have been shipped, what must be sent to the buyer?
A. A letter
B. Cash
C. The invoice
D. The check
2: What are two examples of documents to carry when visiting a customer for a collection?
A. The customer's credit report and income statement
B. A statement of the customer's account, and documentation of all disputes
C. The customer's invoice and a copy of their receipt
D. The customer's balance sheet and statement of cash flows
3: Chapter 7 bankruptcy entails what activity?
A. Leveraged buyouts
B. Hostile takeovers
C. The liquidation of a business
D. The insolvency of a business
4: What can happen if a company fails to read an invoice?
A. All invoices are electronic and can't be changed in any way
B. Vendors may sue the company
C. Nothing happens because all invoices are standard
D. Vendors may introduce clauses that companies cannot agree to
5: What does “DSO” stand for, and how is it calculated?
A. Day sales outstanding. Gross payables / (Annual net sales / 2000)
B. Day sales outstanding. Gross receivables / (Annual net sales / 12)
C. Day sales outstanding. Net income / (Annual net sales / 365)
D. Day sales outstanding. Gross receivables / (Annual net sales / 365)
6: Why is the allowance method used over the direct write off method when dealing with uncollectible accounts receivable?
A. The accounts receivable will be decreased on the balance sheet using allowance for doubful accounts
B. (None of these)
C. The accounts receivable will be increased on the balance sheet using allowance for doubful accounts
7: True or False? Net sale on a shipment of goods is the total amount of goods sold minus the non-acceptable goods sold to a customer
A. True
B. False
8: True or False? A higher accounts receivable turnover ratio is generally favorable.
A. True
B. False
9: Account receivables are categorized as current assets assuming they are due within
A. 6 months
B. 1 year
C. 30 days
D. 15 days
10: How often is a bad debt expense closed?
A. no time frame
B. 60 days
C. 1 year
D. 30 days
11: When computing an average balance of accounts receivable one should use
A. one day a month
B. every day of the year
C. one day a year
D. two days a year
12: Sometimes when an account receivable is not paid a business can turn to
A. a collection agency
B. (All of these)
C. a collection attorney
13: An account receivable turnover ratio is 5, while the company sales were $100,000. What is average balance of accounts receivable?
A. $20000
B. $500000
C. $200000
D. (None of these)
14: Why is it central to the life of a business that sales and credit departments work together?
A. It makes the processing of electronic payments faster
B. It's not. It's better for credit and sales to compete.
C. Selling an item to the right party at the right price is a team effort
D. It becomes easier for customers to get credit to buy more items
15: Compute the accounts receivable collection period if a company had $400,000 net credit sales and its accounts receivable balance was $30,000.
A. $400,000*365/$30,000
B. $30,000/365
C. $30,000*365/$400,000
D. $400,000/365
16: Which of the following is an example of an accounts receivable?
A. a trade receivable
B. (All of these)
C. a non trade receivable
17: Compute the accounts receivable collection period if a company had $500,000 net credit sales and its accounts receivable balance was $40,000.
A. $40,000/365
B. $500,000/365
C. $500,000*365/$40,000
D. $40,000*365/$500,000
18: What is one downside to electronic billing?
A. The increase in personnel to run the system
B. The setup cost
C. The reduction in paper waste
D. The speed of processing
19: When a customer has no credit history, what is a possible option to make a sale?
A. Security interest
B. Credit option
C. Credit interest
D. There is no option
20: Why are there conflicts between credit and sales?
A. The function of sales is contingent upon the credit department granting credit to the customer
B. Because management puts pressure on the credit department to offer more credit
C. Because the accounts receivable department puts pressure on them
D. Because accounting puts pressure on sales to earn more money
21: Who is the best contact for receiving information about legal issues and credit?
A. FINRA
B. National Association of Credit Management
C. FDIC
D. IRS
22: What terms do sellers prefer to sell to customers?
A. They prefer to sell to customers with poor credit
B. Cash-in-advance, or CIA
C. On credit
D. They prefer to sell to customers with no cash and bad credit
23: The title of a good transfers to the buyer at the shipping point. This is likely an example of a/an _____ shipping point.
A. same day
B. FOB
C. SEC
D. SCA
E. AMP
24: When you have converted valuable financial data to an authorized, unreadable state, what has happened to it?
A. It has been encrypted
B. It has been compressed
C. It has been read
D. It has been decrypted
25: What is the last resort when it comes to collections?
A. Use a third-party billing agency who may charge a percentage of the total recovered
B. Reporting the company to the IRS
C. Calling the authorities
D. Hiring a company like KPMG to settle the account
26: What is an example of a modern software that handles accounts payable?
A. APcash
B. Quickbooks
C. CashBooks
D. PayInvoice
27: In order to secure you a line of credit, you could use accounts receivable as _______.
A. account payables
B. collateral
C. cash payment
28: A common payment term for accounts receivable is:
A. 60 days
B. 30 days
C. 6 months
D. 1 year
29: What does GAAP stand for?
A. Generally Acheivable Accounting Principles
B. Generally Acheivable Accounting Practices
C. Generally Accepted Accounting Principles
D. Generally Accepted Accounting Practices
30: How should a collections fax be addressed to be used to its greatest advantage?
A. They should be addressed to the appropriate party
B. They should be addressed to the CEO
C. They should have no address to maintain privacy
D. They should be addressed to the government
31: True or False? A secured creditor is someone who that has a legal right to the company's assets.
A. False
B. True
32: What is an advantage of a seller deciding to offer its goods and services on credit?
A. potential increase in revenues
B. (All of these)
C. Increase efficiency of transactions
D. Convenience for buyers
33: What is the defintion of accounts receivable?
A. The money from a business that it owes and is shown on the balance sheet as a liability.
B. A claim of payment for a business for services it had done for a particular customer or client
C. (None of these)
34: Which are examples of document tools that are valuable to accounts receivable?
A. Televisions and radios
B. The Internet and overhead projectors
C. Pagers and cell phones
D. Electronic data interchange, and optical character recognition
35: What do terms of an invoice suggest?
A. Quality of a product purchased
B. They indicate the satisfaction level of the seller
C. They indicate the amount of discounts the buyer can receive on the next bill
D. Invoice terms indicate when the bill is to be paid
36: What must a debtor file in a voluntary bankruptcy?
A. Articles of incorporation
B. A subpoena
C. Finra registration
D. A petition for liquidation
37: An example of nontrade receivables are
A. employee loans owed
B. (All of these)
C. insurance clams owed
D. tax refund owed
38: True or False? With the help of aging one can usually detemine uncollectable accounts receivable.
A. True
B. False
39: A subsidiary ledger for accounts receivable has the information on which of the following
A. returns of goods
B. credit sales to clients
C. discounts
D. (All of these)
40: Which of the following is a good rule to follow in accounts receivable?
A. Let management handle all invoices
B. Process invoices at the end of the first quarter
C. Send all invoices to accounts payable
D. Print and mail invoices as quickly as possible; the sooner an invoice is sent, the sooner you get paid
41: What is a revolutionary solution to issues in billing accuracy?
A. Manual billing
B. Billing in person
C. The credit card imprinter
D. Electronic billing
42: Another name for an account receivable is
A. a trade receivable
B. a cash payment
C. a trade payable
D. a trade payment
43: What is bankruptcy?
A. Bankruptcy occurs when a business, person, or legal entity has paid its debts owed to its creditors
B. Bankruptcy occurs when a business, person, or legal entity cannot repay debts owed to its creditors
C. Bankruptcy occurs when a business, person, or legal entity cannot pay dividends
D. Bankruptcy occurs when a business, person, or legal entity has reached its maximum earning potential
44: True or False? Invoices are typically used by the business and deliviered to the customer for an agreed payment time.
A. False
B. True
45: True or False? Aging is often broken up into several categories such as current, 1-30 days past due, 31-60 days past due etc.
A. False
B. True
46: True or False? Sometimes a company will provide a cash discount in order to incentivize a customer to pay in a timely fashion.
A. False
B. True
47: True or False? A debtor can pay before its due date.
A. False
B. True
48: Which of the following are two common bookkeeping methods?
A. the allowance method and direct write-off method
B. the income method and direct write-off method
C. the allowance method and indirect write-off method
49: What three important documents, and following material, are critical in a financial statement for credit evaluation?
A. Bank statement, balance sheet, cash flow statement, and 10K
B. Credit statement, balance sheet, accounting statement, and notes
C. Income report, banking sheet, cash flow statement, and anecdotes
D. Income statement, balance sheet, cash flow statement, and footnotes
50: What function do letters of credit serve?
A. They are documents stating the buyers intent to pay the seller
B. They are documents from the credit card company urging payment of late charges
C. They are documents stating the sellers intent to default on payment
D. They are documents expressing a buyer's need to be granted credit
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Accounts Receivable MCQs
Вопросы по дебиторской задолженности на русском языке
Preguntas sobre cuentas por cobrar en español
日本語での売掛金に関する質問
Domande sui crediti in lingua italiana
Questions sur les comptes clients en français
Perguntas sobre contas a receber em português
Fragen zur Debitorenbuchhaltung in deutscher Sprache
中文应收账款问题
أسئلة حسابات القبض باللغات العربية
Pertanyaan Piutang Usaha dalam bahasa Indonesia
Alacak Hesapları Türkçe dilinde sorular
