Accounts Payable Flashcards
Three-way match
- Purchase Order
- Packing Slip
- Invoice
Components of PO
- Price
- Quantity
- Item
- Payment terms
Types of POs
- Standard (one-time)
- Contract (ongoing purchases)
- Standing (same amount of item purchased at repeating intervals)
- Blanket (good for a certain dollar amount)
What to do if there is a discrepancy on an invoice.
Research and contact the vendor. Make sure you have backup.
What does 2/10/net 30 mean?
The invoice is due in full within 30 days of the invoice date. If paid within 10 days, you may apply a 2% discount.
What is the purpose of a PO?
To determine whether the amounts are within budgetary allowances and if they are lawful expenditures (ed code).
What are fixed assets?
Items that will be used long term (ex: equipment).
How do you track fixed assets?
Using barcodes, QR codes, serial numbered tags.
Who should receive a 1099 form?
Any person or vendor, who is not an employee, that has been paid more than $600 that year.
What is a W-9 for?
To collect names and TIN so that you can prepare 1099s.
Independent Contractor vs. Employee
the payer has the right to control only the result of the work (ind cont) and not how the work is done (ee)
What are payment terms?
Specify how, when and by what method payment is due. And if any discounts could potentially apply.
What is a liability?
Money owed to creditors.
What is positive pay?
A system in which banks receive a report of checks paid and they use that report to compare to checks that come in. Helps prevent check fraud.
What are debits and credits?
Debits and credits indicate where money is flowing in and out of various accounts. They must be equal so that the books balance. In double entry accounting, every transaction must have a debit and a credit.
