The Primary Purpose of the Accounts Payable Function

question 79

Multiple Choice

The primary purpose of the accounts payable function

• A) is to examine all incoming invoices and determine the proper amount to be paid.
• B) is to generate float for the firm.
• C) is to pay invoices as soon as possible.
• D) none of the above.

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Definitions:

Historical Cost Principle

A fundamental accounting rule stating that assets must be logged and presented at the cost they were originally bought for.

Going Concern Principle

An accounting assumption that a company will continue operating and not go bankrupt or be liquidated in the foreseeable future.

Straight-Line Deprecation

A method of calculating the depreciation of an asset, dividing its cost by the number of years it is expected to be useful.

Book Value

The net value of a company's assets, found by deducting total liabilities and intangible assets from total assets.