100+ Accounts Payable Executive Interview Questions and Answers

Answers to common accounting questions including financial, cost, and management accounting, as well as ratios and golden rules.

• Financial accounting is the process of recording, summarizing, and reporting financial transactions of a business.

• Cost accounting involves analyzing the costs of producing a product or service to help with decision-making and cost control.

• Management accounting provides financial information to help with planning, controlling, and decision-making with...read more

Answers to common accounts payable terms

• 2 way match: matching the invoice to the purchase order

• 3 way match: matching the invoice to the purchase order and receipt of goods

• P2P cycle: Procure to Pay cycle, the process of purchasing goods or services

• Purchase requisition: a document used to request goods or services

• Invoice: a bill for goods or services received

• Purchase order: a document used to order goods or services

JE tracker is a tool used in accounting to record journal entries and their details.

• JE tracker stands for Journal Entry tracker.

• It is used to record journal entries and their details such as date, account name, debit/credit amount, and description.

• It helps in tracking and managing journal entries for accurate financial reporting.

• Examples of information recorded in JE tracker include adjusting entries, accruals, and deferrals.

Sales returns are products that customers return to the company for various reasons.

• Sales returns refer to the products that customers return to the company.

• These returns can occur due to various reasons such as product defects, customer dissatisfaction, or incorrect shipments.

• Sales returns are recorded as a reduction in revenue and accounts receivable.

• They are typically accompanied by a credit memo or refund to the customer.

• Examples of sales returns include returning a fault...read more

A set of questions related to accounting and finance.

• Tax is a mandatory financial charge imposed by the government on income, goods, and services.

• GRN stands for Goods Receipt Note, which is a document that confirms the receipt of goods from a supplier.

• The process refers to the steps involved in completing a task or achieving a goal.

• Credit sales are transactions where the customer buys goods or services on credit and pays later.

• Debit sales are transactions where the payment is...read more

The entry for purchasing with GST involves debiting the expense account and crediting the GST payable account.

• Debit the expense account for the cost of the purchase

• Credit the GST payable account for the amount of GST paid

• Example: Debit Purchases account for $100 and credit GST payable account for $10 if the purchase cost $100 and the GST rate is 10%

Accounts where financial transactions are recorded and classified according to the nature of the transaction.

• Accounts are used to keep track of financial transactions

• They are classified based on the nature of the transaction

• Examples include accounts payable, accounts receivable, and cash accounts

P2P stands for Procure-to-Pay, a process that involves purchasing goods or services and paying for them.

• P2P involves the entire procurement process from identifying the need for goods or services to paying for them

• It includes activities such as requisitioning, purchasing, receiving, and invoicing

• P2P aims to streamline the procurement process, reduce costs, and improve efficiency

• Examples of P2P software include SAP Ariba, Coupa, and Oracle Procurement Cloud

AP is Accounts Payable, P2P Cycle is Procure to Pay Cycle, Golden Rules of Accounting are basic principles of accounting.

• AP is the process of managing and paying invoices from vendors or suppliers.

• P2P Cycle is the process of procuring goods or services and paying for them.

• Golden Rules of Accounting are basic principles of accounting that govern the preparation of financial statements.

• The three golden rules of accounting are: Debit what comes in, Credit what goes out; Debit th...read more

Debit net refers to the total amount of debits in a financial transaction.

• Debit net is the sum of all debits in a financial transaction.

• It is used to calculate the total amount owed by a company or individual.

• For example, if a company has $100 in debits and $50 in credits, the debit net would be $50.

• Debit net is important in accounting and financial management.

I work in various accounting software for invoice processing.

• I have experience working with popular accounting software such as QuickBooks, SAP, and Oracle.

• I am proficient in using spreadsheets like Microsoft Excel for invoice processing.

• I am familiar with automated invoice processing systems like Ariba and Coupa.

• I have also used specialized invoice processing software like Concur and Bill.com.

• I am adaptable and quick to learn new software as per the organization's requiremen...read more

Accounts payable is the amount of money a company owes to its vendors or suppliers for goods and services received.

• It is a liability account in the company's balance sheet.

• It includes invoices, bills, and other expenses that are yet to be paid.

• It is an important aspect of cash flow management.

• Examples include rent, utilities, office supplies, and inventory purchases.

Debit note and credit note are accounting documents used to record adjustments in financial transactions.

• Debit note is issued by a buyer to a seller to request a credit for overcharged or returned goods/services.

• Credit note is issued by a seller to a buyer to provide a credit for undercharged or faulty goods/services.

• Debit note increases the buyer's accounts payable and decreases the seller's accounts receivable.

• Credit note decreases the buyer's accounts payable and increases...read more

Payment entry with TDS & GST impact includes deduction of TDS and addition of GST in the payment amount.

• TDS is deducted from the payment amount as per the applicable rate

• GST is added to the payment amount as per the applicable rate

• The net payment amount after deducting TDS and adding GST is recorded in the payment entry

• The TDS and GST amounts are separately recorded in the books of accounts

An accounting entry for a purchase is a debit to the Purchases account and a credit to the Accounts Payable account.

• Debit the Purchases account to record the cost of the purchase

• Credit the Accounts Payable account to show the amount owed to the supplier

• This entry increases the Purchases account and the Accounts Payable account

• Example: Debit Purchases $1,000 and credit Accounts Payable $1,000

The 3 way machine is a tool used in accounts payable to match purchase orders, invoices, and receiving reports.

• The machine compares the three documents to ensure accuracy and prevent fraud.

• It helps to identify discrepancies and resolve them before payment is made.

• For example, if the invoice amount is higher than the purchase order amount, the machine will flag the discrepancy for review.

• The 3 way machine is an important tool in maintaining the integrity of the accounts payabl...read more

Debit Note and Credit Note are used in accounting to adjust invoices. 2 way and 3 way match are methods of verifying invoices.

• Debit Note is issued by the buyer to the seller when goods are returned or when there is an overcharge in the invoice.

• Credit Note is issued by the seller to the buyer when there is a reduction in the invoice amount due to returns or overcharges.

• 2 way match is a comparison of the invoice to the purchase order to ensure the correct goods were received at...read more

P2P stands for Procure-to-Pay, which is the process of purchasing goods or services and paying for them.

• P2P involves the entire process from requisition to payment

• It includes activities such as vendor selection, purchase order creation, invoice processing, and payment

• P2P aims to streamline the purchasing process and ensure timely and accurate payments

• Examples of P2P software include SAP Ariba, Coupa, and Basware

GST stands for Goods and Services Tax. It is a single tax system that replaced multiple indirect taxes in India.

• GST is a destination-based tax system

• It is levied on the value of goods and services at each stage of the supply chain

• GST rates vary across different goods and services

• It is applicable across all states in India

• GST has simplified the tax structure and reduced tax evasion

Accounts Payable is the process of managing and paying invoices. Invoices are bills for goods or services received.

• Accounts Payable is a department responsible for managing and processing invoices

• Invoices are bills received from vendors for goods or services purchased

• PO (Purchase Order) is a document issued by a buyer to a seller, indicating the type, quantity, and agreed price for products or services

• Non-PO invoices are bills received without a purchase order, often for serv...read more

Purchase orders can be categorized into standard, blanket, planned, and contract types.

• Standard purchase orders are used for one-time purchases.

• Blanket purchase orders are used for recurring purchases over a period of time.

• Planned purchase orders are used for future purchases based on a forecast.

• Contract purchase orders are used for purchases based on a long-term agreement.

• Examples: Standard - office supplies, Blanket - maintenance services, Planned - raw materials, Contract ...read more

A credit note is a document issued by a seller to a buyer, indicating that a certain amount has been credited to the buyer's account.

• It is a document issued by a seller to a buyer

• It indicates that a certain amount has been credited to the buyer's account

• It is usually issued when there is an overpayment or a return of goods

• It serves as a proof of the transaction and helps in reconciling accounts

There are several modes of payment including cash, check, credit/debit card, wire transfer, and online payment.

• Cash

• Check

• Credit/debit card

• Wire transfer

• Online payment

TDS stands for Tax Deducted at Source. It is a tax collected by the government at the time of payment.

• TDS is a tax collected by the government at the time of payment.

• It is deducted from the payment made to the recipient.

• The person making the payment is responsible for deducting TDS and depositing it with the government.

• TDS is applicable on various types of payments such as salary, rent, commission, etc.

• The TDS entry in the books of accounts will show the amount deducted and d...read more

To book an invoice and purchase order, you need to match the details on the invoice with the corresponding purchase order and enter them into the accounting system.

• Verify that the details on the invoice match the corresponding purchase order.

• Enter the invoice details into the accounting system, including the invoice number, date, amount, and payment terms.

• Match the invoice to the purchase order in the accounting system to ensure accuracy.

• Record the invoice as a liability in t...read more

The entry for adjusting the amount of vendors is to debit or credit the accounts payable and the corresponding expense or income account.

• To increase the amount owed to a vendor, debit the accounts payable account and credit the expense account.

• To decrease the amount owed to a vendor, credit the accounts payable account and debit the expense account.

• Adjustments can also be made to correct errors or reconcile discrepancies in vendor invoices or payments.

• For example, if a vendor...read more

Bank reconciliation statement is a document that compares the bank statement with the company's records to identify any discrepancies.

• It is used to ensure that the company's records match the bank's records

• It helps in identifying errors, omissions, or fraudulent activities

• It includes comparing deposits, withdrawals, and bank charges

• Reconciling items may include outstanding checks, deposits in transit, and bank errors

• The statement is prepared regularly to maintain accurate fin...read more

I carefully review all documents to identify and resolve discrepancies.

• Compare the purchase order details with the invoice and receipts to identify any discrepancies

• Communicate with vendors or suppliers to clarify any discrepancies and request corrected invoices if necessary

• Work closely with the procurement team to ensure accurate documentation and resolve any issues promptly

The transaction code for vendor display is XK03.

• Transaction code XK03 is used to display vendor master data.

• It can be used to view vendor details such as address, payment terms, and bank information.

• XK03 can also be used to make changes to vendor master data.

• Other related transaction codes include XK04 for vendor changes and XK05 for vendor block/unblock.

P2P stands for Procure to Pay, which is the process of obtaining and paying for goods and services.

• P2P Cycle involves the steps from requisitioning goods/services to making payment for them.

• A pivot table is a data summarization tool in Excel that allows for quick analysis and comparison of data.

• SAP T Codes are transaction codes used in SAP software to access specific functions or perform specific tasks.

• PO based invoice processing involves matching invoices to purchase orders,...read more

P2P cycle or AP refers to the end-to-end process of purchasing goods or services, receiving and verifying invoices, and making payments to vendors.

• P2P stands for Procure-to-Pay, which encompasses all activities from requisitioning to payment.

• Accounts Payable (AP) is the department responsible for managing and processing vendor invoices.

• The P2P cycle starts with the identification of a need for goods or services and ends with the payment to the vendor.

• Key steps in the P2P cycl...read more

Procure to pay (P2P) is a process that involves the acquisition of goods or services, from the procurement stage to the payment stage.

• P2P is a comprehensive process that includes requisitioning, purchasing, receiving, and paying for goods or services.

• It starts with the identification of a need, followed by supplier selection, purchase order creation, goods receipt, invoice processing, and ends with payment to the supplier.

• P2P aims to streamline and automate the entire procure...read more

PO invoices are based on purchase orders, while non-PO invoices are not associated with a purchase order.

• PO invoices are generated when a purchase order is created and approved before the goods or services are received.

• Non-PO invoices are not tied to a purchase order and are typically used for one-time purchases or services.

• PO invoices require matching with the corresponding purchase order and goods receipt, while non-PO invoices do not have this requirement.

• PO invoices help ...read more

Credit Note is issued by a seller to a buyer for reducing the amount payable, while Debit Note is issued by a buyer to a seller for increasing the amount payable.

• Credit Note reduces the amount payable by the buyer to the seller.

• Debit Note increases the amount payable by the buyer to the seller.

• Credit Note is issued when there is an overcharge or return of goods.

• Debit Note is issued when there is an undercharge or additional goods received.

• Both Credit Note and Debit Note are u...read more

2 way matching compares invoice and purchase order, 3 way matching adds receipt of goods to the comparison. GRN t.code is MIGO. P2P cycle is Procure to Pay cycle.

• 2 way matching compares invoice and purchase order

• 3 way matching adds receipt of goods to the comparison

• GRN t.code is MIGO

• P2P cycle is Procure to Pay cycle

Trading affects P/L which in turn affects the Balance Sheet.

• Trading activities impact the revenue and expenses recorded in the P/L statement.

• The P/L statement shows the net income or loss for a period.

• The net income or loss is then reflected in the equity section of the Balance Sheet.

• Changes in assets and liabilities also impact the Balance Sheet.

• For example, if a company sells inventory, it will increase revenue in the P/L statement and decrease inventory in the Balance Shee...read more

The purchase entry for TDS includes debiting the expense account and crediting the TDS payable account.

• Debit the expense account for the amount of the purchase

• Credit the TDS payable account for the TDS amount deducted

• Example: Debit Purchases account for Rs. 10,000 and Credit TDS Payable account for Rs. 1,000

Accounts payable is the amount a company owes to its suppliers for goods and services purchased on credit.

• Accounts payable is a liability on the balance sheet

• It represents the amount a company owes to its suppliers for goods or services received

• Accounts receivable is the opposite, representing the money owed to a company by its customers

• Accounts payable is typically paid within a certain period, often 30, 60, or 90 days

• Examples of accounts payable include invoices from vendor...read more

3 way matching is a process of matching purchase orders, receipts, and invoices to ensure accuracy and prevent fraud.

• It involves comparing the purchase order to the goods receipt to the invoice

• All three documents must match in terms of quantity, price, and product description

• It helps to prevent overpayment, underpayment, and duplicate payments

• For example, if a company orders 100 units of a product, receives 90 units, and is invoiced for 100 units, the discrepancy will be caug...read more

TDS and GST have different due dates depending on the type of taxpayer and the frequency of filing.

• TDS due dates vary based on the type of payment and the category of taxpayer.

• For example, TDS on salary payments is due on the 7th of the following month, while TDS on rent payments is due on the 30th of the following month.

• GST due dates depend on the turnover of the taxpayer and the frequency of filing.

• For example, taxpayers with a turnover of less than 1.5 crores can file GST ...read more

Validating and verifying invoices by explaining all transaction codes step by step.

• First, review the invoice for accuracy and completeness.

• Next, match the invoice to the purchase order and receiving report.

• Then, enter the invoice details into the accounting system using the appropriate transaction code.

• Finally, reconcile the invoice with the vendor statement to ensure all payments are accounted for.

• Example: Transaction code 101 may represent a standard invoice entry, while co...read more

Trial balance is a list of all the general ledger accounts and their balances at a specific point in time.

• Prepared at the end of an accounting period

• Used to ensure that debits and credits are equal

• Helps in identifying errors and omissions in the accounting records

• If the debits and credits do not match, it indicates an error in the accounting records

• Example: If the total debit balance is $50,000, the total credit balance should also be $50,000

Journal entries for payable and receivable accounts with GL reconciliation

• Journal entry for accounts payable: Debit accounts payable, credit cash/bank

• Journal entry for accounts receivable: Debit cash/bank, credit accounts receivable

• GL reconciliation involves matching transactions in the general ledger with corresponding entries in subsidiary ledgers

• Ensure accuracy by reconciling balances, investigating discrepancies, and making necessary adjustments

GRN or Goods Receipt Note is a document that records the receipt of goods from a supplier.

• GRN is a document that verifies the receipt of goods from a supplier.

• It contains details such as the quantity and quality of goods received.

• It is used to match the goods received with the purchase order and invoice.

• GRN is an important document for accounts payable as it helps in verifying and processing supplier invoices.

• Example: A company receives a shipment of 100 units of a product fr...read more

3 way matching rule is a process in accounts payable where the purchase order, receiving report, and vendor invoice are compared to ensure accuracy.

• Involves matching the purchase order with the receiving report and vendor invoice

• Ensures that the quantities, prices, and terms on all three documents match

• Helps prevent errors, fraud, and discrepancies in payments

• Example: If a company orders 100 units of a product, receives 90 units, and is invoiced for 100 units, the 3 way match...read more

P2P stands for Procure-to-Pay, which is the process of requisitioning, purchasing, receiving, paying for, and accounting for goods and services.

• P2P involves the entire procurement process from start to finish.

• It starts with a requisition for goods or services, followed by the purchase order, receipt of goods or services, invoice processing, and payment.

• The final step is accounting for the transaction in the company's financial records.

• P2P helps streamline the purchasing proce...read more

Back reconciliation refers to the process of verifying and correcting discrepancies in financial records to ensure accuracy.

• Back reconciliation involves comparing financial records with bank statements to identify any discrepancies.

• It is important to investigate and resolve any differences found during the reconciliation process.

• Back reconciliation helps ensure that all transactions are accurately recorded and accounted for.

• Examples of back reconciliation tasks include matchi...read more