CAP Accounting Paraprofessional Skills and Knowledge Covered 5

Question 1

Which document summarizes all transactions in a customer's account and is sent to request payment?

Accepted Answer

Statement of account

Answer

Purchase order

Answer

Remittance advice

Answer

Promissory note

Question 2

The FUTA tax (Federal Unemployment Tax) is paid by:

Accepted Answer

The employer only

Answer

The employee only

Answer

Both employer and employee equally

Answer

The federal government

Question 3

Which of the following is NOT considered a generally accepted accounting principle (GAAP) concept?

Accepted Answer

Cash basis accounting

Answer

Going concern

Answer

Conservatism

Answer

Revenue recognition

Question 4

When a contra account such as Allowance for Doubtful Accounts is used, it is presented on the balance sheet as:

Accepted Answer

A deduction from Accounts Receivable

Answer

An addition to Accounts Receivable

Answer

A separate current liability

Answer

An operating expense

Question 5

A trial balance that is in balance (debits equal credits) guarantees that:

Accepted Answer

The mathematical equality of debits and credits is maintained

Answer

No errors exist in the accounting records

Answer

Every transaction has been recorded

Answer

Financial statements are ready to be issued

Question 6

Which of the following is an example of an adjusting entry for accrued revenue?

Accepted Answer

Debit Accounts Receivable, Credit Revenue

Answer

Debit Cash, Credit Revenue

Answer

Debit Revenue, Credit Unearned Revenue

Answer

Debit Prepaid Expense, Credit Cash

Question 7

What is the purpose of a subsidiary ledger in accounts payable?

Accepted Answer

To provide detailed records for each individual vendor

Answer

To replace the general ledger for vendor transactions

Answer

To record cash payments only

Answer

To calculate total accounts payable balances for tax purposes