20+ Senior Accounts Payable Executive Interview Questions and Answers

There are several types of invoices including standard, commercial, proforma, credit, and debit invoices.

• Standard invoice: issued after goods or services are delivered

• Commercial invoice: used for international trade and includes details like the country of origin and harmonized system codes

• Proforma invoice: issued before goods or services are delivered and includes estimated costs

• Credit invoice: issued when a refund or credit is due to the buyer

• Debit invoice: issued when addi...read more

Supplier invoices are processed by verifying accuracy, obtaining necessary approvals, entering into system, and scheduling payments.

• Verify accuracy of supplier invoices against purchase orders and receiving reports

• Obtain necessary approvals from appropriate departments or managers

• Enter invoice details into accounting system for tracking and reporting purposes

• Schedule payments based on payment terms and company policies

• Maintain good relationships with suppliers to ensure timel...read more

AP is a P/L item as it represents expenses incurred by the company.

• Accounts Payable (AP) is a liability account that represents the amount owed by a company to its suppliers or vendors for goods or services received.

• As AP represents expenses incurred by the company, it is considered a P/L (Profit and Loss) item.

• AP is recorded on the balance sheet as a current liability until it is paid off.

• Once the payment is made, the AP account is reduced and the cash account is reduced by ...read more

RERA stands for Real Estate Regulatory Authority, a regulatory body in India to protect the interests of home buyers and promote transparency in the real estate sector.

• RERA was enacted in India in 2016 to regulate the real estate sector and ensure timely delivery of projects.

• It aims to bring transparency, accountability, and efficiency in the real estate market.

• RERA mandates that all real estate projects must be registered with the authority before advertising or selling.

• Deve...read more

An ageing report is a document that categorizes and lists outstanding invoices by their due dates.

• An ageing report helps track and manage accounts payable by showing which invoices are overdue and by how many days.

• It typically categorizes invoices into different time periods such as current, 1-30 days past due, 31-60 days past due, etc.

• The report helps identify potential cash flow issues and allows for prioritization of payments to vendors.

• It is a useful tool for monitoring t...read more

Accounts Payable process involves managing and recording all outgoing payments to vendors and suppliers.

• Involves receiving invoices from vendors

• Verifying the accuracy of invoices

• Obtaining approval for payments

• Recording transactions in the accounting system

• Issuing payments to vendors

• Reconciling accounts payable sub-ledger with general ledger

Amortization is the process of spreading out the cost of an asset over its useful life.

• It is a method of accounting used to reduce the value of an asset over time

• It is commonly used for intangible assets such as patents and trademarks

• It is also used for loans and mortgages to calculate periodic payments

• The formula for amortization involves the initial cost, interest rate, and time period

• Example: A company purchases a patent for $100,000 with a useful life of 10 years. The ann...read more

Input and Output credit in GST refers to the taxes paid on inputs and the taxes collected on outputs respectively.

• Input credit is the credit that a business can claim for the tax it has paid on its purchases of goods or services.

• Output credit is the tax collected by a business on the sale of goods or services, which is to be paid to the government.

• Input credit reduces the amount of tax payable by a business, while output credit is the tax liability that needs to be paid to th...read more

Accounting principles are the guidelines and rules that govern the field of accounting.

• Accounting principles ensure consistency and accuracy in financial reporting.

• They include concepts such as the matching principle, revenue recognition, and the time period principle.

• These principles are used to create financial statements that accurately reflect a company's financial position.

• They also help ensure that financial statements are comparable across different companies and indus...read more

Revenue recognition policy is a set of guidelines that determine when and how revenue should be recorded in financial statements.

• Revenue recognition policy outlines the criteria for recognizing revenue from sales of goods or services.

• It ensures that revenue is recorded in the appropriate accounting period when it is earned and realized or realizable.

• The policy may include specific rules for recognizing revenue from long-term contracts, multiple deliverables, or sales with ext...read more

There are three main types of purchase orders: Standard PO, Blanket PO, and Contract PO.

• Standard PO: Used for one-time purchases of goods or services.

• Blanket PO: Used for recurring purchases from a single supplier over a period of time.

• Contract PO: Used for long-term agreements with suppliers for specific goods or services.

• Each type of PO serves a different purpose and has its own set of requirements and processes.

PO stands for Purchase Order, a document issued by a buyer to a seller outlining the details of a purchase agreement.

• PO is a legally binding document that specifies the items or services being purchased, quantities, prices, and terms of the agreement.

• It helps both parties track and manage the purchasing process, ensuring that the buyer receives the goods or services they ordered and the seller gets paid.

• Agreement refers to the terms and conditions agreed upon by both parties ...read more

TDS on goods purchased above 50 lac is applicable at the rate of 1% under section 194Q of the Income Tax Act.

• TDS is deducted at the rate of 1% on the total value of goods purchased if it exceeds 50 lac in a financial year.

• Section 194Q of the Income Tax Act governs TDS on purchase of goods.

• The responsibility of deducting TDS lies with the buyer of the goods.

• The TDS amount deducted needs to be deposited with the government and a TDS certificate must be issued to the seller.

Procure to Pay is the process of obtaining goods or services from a vendor, through to making payment for those goods or services.

• Includes steps such as requisitioning, purchasing, receiving, invoicing, and payment

• Involves coordination between procurement, accounts payable, and vendors

• Ensures proper authorization, receipt of goods/services, and accurate payment processing

Accrual concept refers to the recognition of revenue and expenses in the accounting period in which they are earned or incurred, regardless of when payment is received or made.

• Accrual accounting is the opposite of cash accounting.

• It is used to match revenue and expenses to the correct accounting period.

• Accrued expenses and accrued revenues are examples of accruals.

• Accruals are recorded as adjusting entries in the accounting system.

• Accruals help to provide a more accurate pict...read more

In my current company, the monthly routine involves processing invoices, reconciling accounts, preparing reports, and communicating with vendors.

• Processing invoices received from vendors

• Reconciling accounts to ensure accuracy

• Preparing monthly financial reports

• Communicating with vendors regarding payment status

• Reviewing and approving expense reports

AP process refers to the procedures and systems used by a company to manage and pay its invoices and bills.

• Involves receiving invoices from vendors

• Verifying the accuracy of the invoices

• Obtaining approval for payment

• Processing payments to vendors

• Reconciling accounts payable to ensure accuracy

• Maintaining records of all transactions

P2P process stands for Procure-to-Pay process, which involves the steps from requisitioning goods/services to making payment.

• P2P process starts with creating a purchase requisition for goods/services needed by a department.

• The next step is to obtain approval for the requisition from the appropriate authority.

• Once approved, a purchase order is created and sent to the vendor.

• Goods/services are received and the invoice is matched with the purchase order and receipt.

• Finally, paym...read more

Reconciliation is the process of comparing two sets of records to ensure accuracy and consistency in financial data.

• Involves matching transactions in accounting records with bank statements.

• Example: Comparing invoices received with payments made to ensure all bills are accounted for.

• Helps identify discrepancies, such as missing invoices or duplicate payments.

• Regular reconciliation can prevent fraud and financial errors.

• Example: Monthly reconciliation of accounts payable to en...read more

P2P cycle refers to the Procure-to-Pay cycle, which is the process of obtaining goods or services from a supplier to making payment for them.

• P2P cycle starts with the procurement of goods or services

• It involves receiving and approving invoices from suppliers

• Payment is made to the supplier for the goods or services received

• The cycle ends with reconciliation of payments and supplier accounts

P2P, or Procure-to-Pay, is a process that integrates purchasing and accounts payable functions.

• P2P encompasses the entire procurement process from requisition to payment.

• It involves steps like vendor selection, purchase order creation, and invoice processing.

• For example, a company may use P2P to streamline ordering office supplies and paying suppliers.

• Automation tools can enhance P2P efficiency by reducing manual entry and errors.