CAP Business Math and Calculations 3

Question 1

A company has current assets of $75,000 and current liabilities of $25,000. What is the current ratio?

Accepted Answer

3:1

Answer

Current ratio = $75,000 ÷ $25,000 = 3:1.

Question 2

An asset costs $12,000, has a salvage value of $2,000, and a useful life of 5 years. Using straight-line depreciation, what is the annual depreciation expense?

Accepted Answer

$2,000

Answer

Annual depreciation = (Cost − Salvage) ÷ Life = ($12,000 − $2,000) ÷ 5 = $2,000.

Question 3

Total expenses are $42,000 and sales revenue is $60,000. What percentage of revenue do expenses represent?

Accepted Answer

70%

Answer

$42,000 ÷ $60,000 = 0.70 = 70%.

Question 4

A gross paycheck of $2,800 has deductions of $392.00 (federal tax), $173.60 (Social Security at 6.2%), and $40.60 (Medicare at 1.45%). What is the net pay?

Accepted Answer

$2,193.80

Answer

$2,800.00 − $392.00 − $173.60 − $40.60 = $2,193.80.

Question 5

A business had beginning inventory of $8,000, purchased $22,000 in goods during the period, and has ending inventory of $5,000. What is the cost of goods sold?

Accepted Answer

$25,000

Answer

COGS = Beginning Inventory + Purchases − Ending Inventory = $8,000 + $22,000 − $5,000 = $25,000.

(CAP) Certified Accounting Paraprofessional Practice Test

(CAP) Certified Accounting Paraprofessional Practice Test

CAP Business Math and Calculations 3