CAP Accounting Paraprofessional Skills and Knowledge Covered 2

Question 1

When reconciling a bank statement, which item would appear as an outstanding check on the book side?

Accepted Answer

A check written by the company but not yet cleared the bank

Answer

A deposit made by the bank but not recorded by the company

Answer

A bank service charge not yet recorded in the books

Answer

A check received from a customer but not yet deposited

Question 2

Which inventory costing method assumes the most recently purchased items are sold first?

Accepted Answer

LIFO

Answer

FIFO

Answer

Weighted Average

Answer

Specific Identification

Question 3

A petty cash fund is established for $200. After replenishment, the cashier should have receipts and cash totaling:

Accepted Answer

Exactly $200

Answer

More than $200

Answer

Less than $200

Answer

Whatever amount was originally spent

Question 4

Which of the following is an example of a variable cost for a business?

Accepted Answer

Raw materials used in production

Answer

Monthly lease payment for office space

Answer

Annual insurance premium

Answer

Salaries of permanent staff

Question 5

Accounts receivable turnover is calculated as:

Accepted Answer

Net credit sales divided by average accounts receivable

Answer

Total sales divided by ending accounts receivable

Answer

Average accounts receivable divided by net credit sales

Answer

Net income divided by accounts receivable

Question 6

When a company receives a prepayment from a customer, the correct journal entry is to:

Accepted Answer

Debit Cash and credit Unearned Revenue

Answer

Debit Revenue and credit Cash

Answer

Debit Accounts Receivable and credit Revenue

Answer

Debit Unearned Revenue and credit Accounts Receivable

Question 7

Which financial statement shows a company's financial position at a specific point in time?

Accepted Answer

Balance Sheet

Answer

Income Statement

Answer

Statement of Cash Flows

Answer

Statement of Retained Earnings