Accounts payable may be part of the supply department to ensure on-time payment to suppliers and to reduce transaction costs. This is a common practice in many organizations as it helps streamline the procurement process and ensures timely payments to suppliers. However, care should be taken to ensure that there is no conflict of interest and the process is transparent.

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Accounts Payable

Question 8

Multiple Choice

Accounts payable:

A) may be part of the supply department to ensure on-time payment to suppliers and to reduce transaction costs.
B) should always be separate from purchasing as a good business practice.
C) is legally prohibited from reporting to supply by federal regulations.
D) cannot report to supply because of Generally Accepted Accounting Practices (GAAP) Rule #462.
E) may legally report to supply,but it may convey the perception of conflict of interest to suppliers.

Correct Answer: