What is accounts payable in DoD procurement?

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $24.99Unlock all

Prepare for the Supply Chain Management Officer Course Fiscal Part 1 Test. Study with diverse resources including flashcards and multiple-choice questions. Each question provides hints and explanations. Enhance your exam readiness today!

Multiple Choice

What is accounts payable in DoD procurement?

Explanation:
Accounts payable are amounts owed to vendors for goods or services that have been delivered and accepted. It’s recorded as a liability because the government has an obligation to pay the supplier, not an asset or revenue. In DoD procurement, once a contract delivers the agreed-upon goods or services and acceptance occurs, a liability is recognized for the outstanding amount. That liability remains until payment is made, at which point cash is paid and the accounts payable balance is reduced. This is different from cash on hand (an asset), inventory (assets held for use or sale), or revenue (income earned).

Accounts payable are amounts owed to vendors for goods or services that have been delivered and accepted. It’s recorded as a liability because the government has an obligation to pay the supplier, not an asset or revenue. In DoD procurement, once a contract delivers the agreed-upon goods or services and acceptance occurs, a liability is recognized for the outstanding amount. That liability remains until payment is made, at which point cash is paid and the accounts payable balance is reduced. This is different from cash on hand (an asset), inventory (assets held for use or sale), or revenue (income earned).

More Multiple Choice Questions
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy