Question

The AP application matches invoices, quantities, prices and terms when it performs the control plan. What does the AP application match when it performs the control plan?

1) Invoices
2) Quantities
3) Prices
4) Terms

Answer 1

The AP application matches invoices, quantities, prices, and terms when it performs the control plan, as part of the three-way match process to ensure businesses pay only for goods and services received.

Step-by-step explanation:

The AP (Accounts Payable) application performs what is known as a three-way match as part of its control plan. This process is critical in ensuring that the business only pays for goods and services that have been received and are actually due. When the AP application performs the control plan, it matches the following elements:

1. Invoices - The document issued by a seller to the purchaser, indicating the products, quantities, and agreed prices for products or services the seller has provided to the buyer.
2. Quantities - This ensures that the amount of product delivered matches the amount of product ordered, as indicated on the purchase order.
3. Prices - This verifies that the price billed on the invoice is the same as the price that was agreed upon in the purchase order or contract.
4. Terms - This confirms that the payment terms listed on the invoice match those on the purchase order or contract.

The process helps prevent overpayments, duplicate payments and paying for goods not received. Each of these elements have to agree before a payment is processed, making it an effective control system for managing accounts payable.