Note – Please take our quiz ‘Quiz 9 – Accounts Payable – Intermediate’ on this page before going through the below answers. Only the top 3% of our audience score 10/10 in all of them.
- Name – Quiz 9 – Accounts Payable – Intermediate
- Topic – Accounting Payable
- Answers with Explanations
Q1. Accounts payable is an obligation originated because of _____ made on credit.
Ans. Accounts payable is an obligation originated because of purchases made on credit. It is a short-term liability and in simpler terms total amount which is yet to be paid by the business to its creditors as per the purchase book.
Q2. Accounts payable is a _____.
Ans. Accounts payable is a short-term liability. It is expected to be paid within one accounting year and so is included in short term liabilities.
Q3. Accounts payable is also known as _____.
Ans. Accounts payable is also known as trade payable.
Q4. Under which head of balance sheet are payables shown?
Ans. Payables are shown under current liabilities. Accounts payable are expected to be paid within one accounting year and so are included in current liabilities.
Q5. _____ is an official document generated by buyer as an offer for seller.
Ans. Purchase order is an official document generated by buyer as an offer for seller. It is a document that a buyer sends to a seller in which the scope and details of the services or products required and accepted by the parties are specified.
Q6. This purchase order is made when buyer is sure about order details.
Ans. Standard PO is made when buyer is sure about order details. It is created when a buyer is sure about the order details such as the item, price, delivery schedule, payment terms, etc.
Q7. This purchase order is used when quantity and required delivery schedules are unknown.
Ans. Blanket PO is used when quantity and required delivery schedules are unknown. There can be numerous delivery dates against a blanket PO, they are often used in case of large quantities with exceptional discounts.
Q8. This purchase order is used for a pre-determined purchase anticipated for long-term.
Ans. Planned PO is used for a pre-determined purchase anticipated for long-term. The dates of delivery can only be anticipated therefore only tentative dates are provided to the seller. Item, pricing, and quantity are however known in advance.
Q9. This purchase order is created for a set period of time.
Ans. Contract PO is created for a set period of time. The item, pricing, quantity, etc. can’t be anticipated precisely.
Q10. Payables process is also known as _____ in larger corporations.
Ans. Payables process is also known as P2P in larger corporations. Procure-to-pay (P2P) is a term that encompasses the processes which take place when a company purchases, receives and pays for commodities.