CAP Accounting Paraprofessional Skills and Knowledge Covered 3

Question 1

Which depreciation method results in the highest depreciation expense in the early years of an asset's life?

Accepted Answer

Double declining balance method

Answer

Straight-line method

Answer

Units of production method

Answer

Sum-of-the-years'-digits method

Question 2

An employee earns $3,000 per month. Their federal income tax withholding is $420 and FICA is $229.50. What is the employee's net pay?

Accepted Answer

$2,350.50

Answer

$2,580.00

Answer

$2,771.00

Question 3

Which of the following would be recorded as a capital expenditure rather than a revenue expenditure?

Accepted Answer

Purchasing a new delivery truck

Answer

Replacing a broken window in the office

Answer

Paying for routine equipment maintenance

Answer

Buying office supplies

Question 4

The matching principle in accounting requires that:

Accepted Answer

Revenues and expenses are recorded in the same period they occur

Answer

Assets equal liabilities plus equity

Answer

Cash receipts match cash payments each period

Answer

All debits equal all credits in every transaction

Question 5

A company's gross profit margin is 40% and net sales are $500,000. What is the cost of goods sold?

Accepted Answer

$300,000

Answer

$200,000

Answer

$150,000

Answer

$350,000

Question 6

Which account is used to record money owed to suppliers for goods purchased on credit?

Accepted Answer

Accounts Payable

Answer

Accounts Receivable

Answer

Notes Payable

Answer

Accrued Liabilities

Question 7

When preparing a bank reconciliation, a deposit in transit should be:

Accepted Answer

Added to the bank balance

Answer

Subtracted from the bank balance

Answer

Added to the book balance

Answer

Subtracted from the book balance