Free CAPA Management and Compliance Questions and Answers

Question 1

An account payable on the books of the buyer should be an account __________ on the books of the seller.

Accepted Answer

receivable

Answer

Explanation:
When one party records an account payable (money owed), the other party records the corresponding transaction as an account receivable (money owed to them). In this case, if the buyer has an account payable, the seller would have an account receivable to reflect the money owed to them by the buyer.

Question 2

The Internal Revenue Service form to be issued for amounts paid to independent contractors (that are not corporations) for services provided is __________.

Accepted Answer

Form 1099-NEC

Answer

Explanation:
Form 1099-NEC is used to report non-employee compensation, such as payments made to independent contractors for services rendered. It is issued to individuals or entities who are not employees but have provided services to the payer during the tax year. This form helps the IRS track income earned by independent contractors and ensures that they report their earnings accurately on their tax returns.

Question 3

The Internal Revenue Service form used to request a taxpayer identification number from a vendor is __________.

Accepted Answer

Form W-9

Answer

Explanation:
Form W-9 is the Request for Taxpayer Identification Number and Certification. It is used by businesses and individuals who are required to report certain payments to the IRS, such as payments made to independent contractors or interest income paid to individuals. When a payer needs to obtain the taxpayer identification number (TIN) of a vendor or contractor, they typically request them to fill out and return a completed Form W-9. This form provides the payer with the vendor's TIN, which is necessary for reporting payments to the IRS.

Question 4

Under the accrual method of accounting, the expenses that have been incurred but not yet entered as accounts payable should be part of an accrual-type __________ entry.

Accepted Answer

adjusting

Answer

Explanation:
In the accrual method of accounting, adjusting entries are made to ensure that revenues and expenses are recognized in the period in which they are earned or incurred, regardless of when cash is received or paid. Expenses that have been incurred but not yet recorded as accounts payable need to be recognized through adjusting entries to reflect the accurate financial position of the company.

Question 5

The amounts accrued at the end of the current accounting period often become the amounts in the __________ entry in the subsequent accounting period.

Accepted Answer

reversing

Answer

Explanation:
Reversing entries are made at the beginning of the new accounting period to reverse the effects of certain adjusting entries made at the end of the previous period. This process simplifies accounting procedures and ensures that the expenses or revenues accrued in the previous period are correctly recorded in the new period.

CAPA - Certified Accounts Payable Associate Practice Test

CAPA - Certified Accounts Payable Associate Practice Test

Free CAPA Management and Compliance Questions and Answers