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

JE tracker is a tool used to record journal entries and related information in accounting.

• JE tracker stands for Journal Entry tracker.

• It is used to record journal entries in accounting.

• It helps in tracking the source, date, and amount of each journal entry.

• It also records the accounts affected by the journal entry.

• JE tracker is an important tool for maintaining accurate financial records.

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

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

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%

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

Creditor, as the company is receiving cash for the raw material

• The company receiving the cash for the raw material is the Creditor

• The party paying for the raw material in cash is the Debtor

• Example: If a supplier pays cash for raw material, they are the Creditor and the company receiving the cash is the Debtor

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.

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

Reconciliation is the process of comparing financial records to ensure accuracy and consistency.

• Objective is to identify discrepancies between records

• Ensures accuracy of financial data

• Helps in detecting errors or fraud

• Aids in maintaining financial integrity

• Important for financial reporting and decision-making

• Example: Reconciling bank statements with company records

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

I process invoices by verifying accuracy, coding, obtaining approvals, and entering into the system. I address queries related to payment status, discrepancies, and vendor information through email.

• Verify accuracy of invoices

• Code invoices based on expense categories

• Obtain necessary approvals before processing

• Enter invoices into the accounting system

• Address queries related to payment status

• Resolve discrepancies in invoices

• Update vendor information as needed

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

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

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

When invoicing in a different currency, I take actions such as converting the amount to the company's base currency, checking for exchange rate fluctuations, and ensuring accuracy in the conversion process.

• Convert the amount on the invoice to the company's base currency using the current exchange rate

• Check for exchange rate fluctuations to ensure accuracy in the conversion process

• Communicate with vendors or suppliers to clarify any discrepancies in the invoiced amount

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

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

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

GST and TDS compliance are essential in an AP position to ensure accurate tax reporting and adherence to government regulations.

• Ensuring accurate calculation and timely payment of GST on vendor invoices

• Deducting TDS as per government regulations on payments made to vendors

• Maintaining proper documentation and records for GST and TDS compliance audits

• Reconciling GST and TDS amounts with financial statements for reporting purposes

SLA stands for Service Level Agreement and KPI stands for Key Performance Indicator. They are both important metrics in measuring performance.

• SLA is a contract between a service provider and a customer, outlining the level of service expected. KPI is a measurable value that demonstrates how effectively a company is achieving key business objectives.

• SLA focuses on the agreed upon level of service, while KPI focuses on performance indicators.

• SLA is usually a part of a contract,...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