Utah Contractor Practice Exam

Where should a construction company file its copy of each bill sent out by the bookkeeper?

1. Accounts payable

2. Notes payable

3. Operating profit

4. Accounts receivable

The correct answer is: Accounts receivable

In the context of construction company accounting, bills sent out by the bookkeeper pertain to transactions where the company is expecting to receive payment, which aligns with the concept of accounts receivable. This category is used to track amounts owed by clients for services rendered or goods provided. When a company sends out a bill, it is effectively documenting a sale or a service provided to a customer, establishing a receivable. Records related to accounts receivable help a business manage and monitor incoming cash flow, confirming that payments are collected in a timely manner. Properly filing these bills under accounts receivable allows the company to maintain accurate records of what is owed to them, ensuring that they can follow up on outstanding payments and effectively manage their financial health. This practice is crucial for maintaining liquidity and ensuring the smooth operation of the company's finances.