Accounts Receivable MCQs (Chapterwise Multiple Choice Questions)

What must a debtor file in a voluntary bankruptcy?

Articles of incorporation

A subpoena

Finra registration

A petition for liquidation

Answer & Explanation

Correct Answer: A petition for liquidation

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True or False? Invoices are typically used by the business and deliviered to the customer for an agreed payment time.

False

True

Answer & Explanation

Correct Answer: True

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How should a collections fax be addressed to be used to its greatest advantage?

They should be addressed to the appropriate party

They should be addressed to the CEO

They should have no address to maintain privacy

They should be addressed to the government

Answer & Explanation

Correct Answer: They should be addressed to the appropriate party

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The benefit of a vague invoice is what?

A vague invoice means that terms are not conditional.

There is no benefit. Vague invoices cause internal billing problems.

A vague invoice is easier to comprehend.

Vague invoices give a company extra time to pay a bill because their recipient is struggling to understand it.

Answer & Explanation

Correct Answer: There is no benefit. Vague invoices cause internal billing problems.

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How do you calculate the days' sales in accounts receivable?

Multiply the number of days in a calendar year by the accounts receivable turnover ratio

Divide the accounts receivable turnover ratio by the number of days in a calendar year

Divide the number of days in a calendar year by the accounts receivable turnover ratio

Subtract the accounts receivable turnover ratio by the number of days in a calendar year

Answer & Explanation

Correct Answer: Divide the number of days in a calendar year by the accounts receivable turnover ratio

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What is the last resort when it comes to collections?

Use a third-party billing agency who may charge a percentage of the total recovered

Reporting the company to the IRS

Calling the authorities

Hiring a company like KPMG to settle the account

Answer & Explanation

Correct Answer: Use a third-party billing agency who may charge a percentage of the total recovered

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How should sales staff be measured to assure their performance is high?

They should be measured based on their compatibility with the company

They should be measured based on customer satisfaction

They should be measured based on attendance

Measure them based on their return on assets

Answer & Explanation

Correct Answer: Measure them based on their return on assets

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Which are examples of document tools that are valuable to accounts receivable?

Televisions and radios

The Internet and overhead projectors

Pagers and cell phones

Electronic data interchange, and optical character recognition

Answer & Explanation

Correct Answer: Electronic data interchange, and optical character recognition

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Which of the following is an example of an accounts receivable?

a trade receivable

(All of these)

a non trade receivable

Answer & Explanation

Correct Answer: (All of these)

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If a company is to be audited for credit approval, what three statements must be provided?

Balance sheet, statement of retained earnings, annual report

Audited statements, reviewed statements, compiled statements

Business statements, reviewed statements, settled statements

Audited statements, income statements, credit statements

Answer & Explanation

Correct Answer: Audited statements, reviewed statements, compiled statements

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Accounts Receivable Quick Quiz

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