AP and AR

Which of the following terms defines when a customer buys a good or service on credit and agrees to pay at a later date?

• Subsidiary ledger

• Accounts Receivable

• Accounts Payable

• Write off

What do these terms mean, '5/7, n/30'?

• 7% discount if paid in 5 days

• 5% discount if paid in 7 days. No discount when paid in 30 days

• 30% discount when paid in 7 days

• 5% discount in 30 days

You are a business owner that purchased inventory on credit terms. Describe the effect of credit purchases on the accounting equation?

• Assets, Increase. Liabilities, Decrease.

  OE, Increase.

• Assets, Decrease.

  OE, Increase.

• Assets, Increase.

  Liabilities, Decrease.

• Assets, Increase. Liabilities, Increase.

Which two qualitative characteristics relates to source documentation in the accounting process?

• Verifiability & Faithful representation

• Comparability & Verifiability

• Relevance & Faithful representation

• Verifiability & Understandability

Which item is not on a tax invoice?

• ABN details

• GST

• Credit Terms

• Tax File Number

Accounting entries representing the money a company owes to creditors for items purchased on credit

• Accounts Receivable

• Accounts Payable

• Purchase Order

• Cash Account