Accounting Paraprofessional Preparation and Exam Resources Flashcards

Which of the following is considered the best method to create a study schedule for the CAP exam?

Answer: Assess weak areas first, then distribute study time proportionally

Identifying weak areas and allocating more study time to them while maintaining review of stronger topics is the most strategic approach.

What does the accounting equation state?

Answer: Assets = Liabilities + Owner's Equity

The fundamental accounting equation states Assets = Liabilities + Owner's Equity, which underpins double-entry bookkeeping.

When preparing for the CAP tax section, which type of business entity is taxed at the individual owner's personal tax rate?

Answer: Both B and C

Both S corporations and sole proprietorships are pass-through entities where income is taxed at the individual owner's personal tax rate.

In QuickBooks, what is the function of the 'Chart of Accounts'?

Answer: A complete list of all accounts used to categorize transactions

The Chart of Accounts is a categorized list of all accounts a company uses to record financial transactions in its general ledger.

Which source document initiates the accounts payable process?

Answer: Purchase order or vendor invoice

Accounts payable is triggered when a company receives a vendor invoice or creates a purchase order documenting a purchase obligation.

A candidate wants to maintain their CAP certification. What is typically required?

Answer: Earning continuing education credits (CPE) each year

CAP certification holders must earn continuing professional education (CPE) credits annually to maintain their credential.

In payroll processing, what does 'gross pay' refer to?

Answer: Total earnings before any deductions are applied

Gross pay is the total compensation earned by an employee before any deductions such as taxes, insurance, or retirement contributions.