CAP Accounting Paraprofessional Skills and Knowledge Covered 4

Question 1

Which form must an employer file annually to report total wages paid and taxes withheld for all employees?

Accepted Answer

Form W-3

Answer

Form 941

Answer

Form W-2

Answer

Form 1099-NEC

Question 2

The current ratio is calculated as:

Accepted Answer

Current Assets divided by Current Liabilities

Answer

Total Assets divided by Total Liabilities

Answer

Net Income divided by Total Revenue

Answer

Cash divided by Current Liabilities

Question 3

Under accrual accounting, when is revenue recognized for a service business?

Accepted Answer

When the service is performed

Answer

When cash is collected from the customer

Answer

When an invoice is sent to the customer

Answer

When the contract is signed

Question 4

A company purchases equipment for $50,000 with a $5,000 salvage value and a 5-year useful life. What is the annual straight-line depreciation?

Accepted Answer

$9,000

Answer

$10,000

Answer

$5,000

Answer

$45,000

Question 5

Which of the following best describes the purpose of internal controls in an accounting system?

Accepted Answer

To safeguard assets and ensure accuracy of financial records

Answer

To maximize company profits

Answer

To reduce the number of accounting staff needed

Answer

To eliminate the need for external audits

Question 6

Which type of business entity offers limited liability to all owners while avoiding double taxation?

Accepted Answer

Limited Liability Company (LLC)

Answer

C Corporation

Answer

Sole Proprietorship

Answer

General Partnership

Question 7

If a company has $80,000 in total assets and $30,000 in total liabilities, what is the total owner's equity?

Accepted Answer

$50,000

Answer

$110,000

Answer

$30,000

Answer

$80,000