CAP Financial Management and Budgeting 2 — Questions and Answers
Question 1: What is the purpose of a three-way match in accounts payable?
- Matching three vendors for the same purchase
- Verifying that the purchase order, receiving report, and vendor invoice agree before payment (Correct answer)
- Reconciling three months of bank statements
- Comparing three budget scenarios
Correct answer: Verifying that the purchase order, receiving report, and vendor invoice agree before payment
A three-way match confirms that the PO, receiving report, and invoice all agree on quantity and price before authorizing payment.
Question 2: Which depreciation method allocates an equal expense amount each year over an asset's useful life?
- Double declining balance
- Units of production
- Straight-line depreciation (Correct answer)
- Sum-of-the-years' digits
Correct answer: Straight-line depreciation
Straight-line depreciation divides the asset's cost evenly across its useful life, producing a constant annual expense.
Question 3: When an admin prepares a cost-benefit analysis for a proposed office renovation, what should the analysis include?
- Only the upfront renovation costs
- All expected costs and all anticipated benefits, expressed in monetary terms (Correct answer)
- The renovation contractor's reference list
- Employee satisfaction scores from prior years
Correct answer: All expected costs and all anticipated benefits, expressed in monetary terms
A cost-benefit analysis quantifies all costs and benefits in monetary terms to determine whether the investment is justified.
Question 4: What does accounts receivable represent on a company's balance sheet?
- Money the company owes to suppliers
- Money owed to the company by customers for goods or services already delivered (Correct answer)
- Cash held in the company bank account
- Long-term debt obligations
Correct answer: Money owed to the company by customers for goods or services already delivered
Accounts receivable is a current asset representing amounts customers owe the company for delivered goods or services.
Question 5: An admin is reconciling the office credit card statement. Which step should come first?
- Pay the outstanding balance immediately
- Match each statement transaction to its corresponding receipt (Correct answer)
- Dispute all unrecognized charges
- File the statement without review
Correct answer: Match each statement transaction to its corresponding receipt
Reconciliation begins by matching each statement transaction to its receipt to verify accuracy before any payment or dispute.
Question 6: Which IRS form do U.S. companies use to report non-employee compensation of $600 or more to independent contractors?
- W-2
- 1099-NEC (Correct answer)
- W-4
- 1040
Correct answer: 1099-NEC
Form 1099-NEC (Nonemployee Compensation) is filed with the IRS and provided to contractors paid $600 or more in a tax year.
CAP Financial Management and Budgeting 2
What is the purpose of a three-way match in accounts payable?