Preview Questions Law Firm Accountant | Role Specific Skill

Question 1: How does "employee benefits taxation" impact payroll in law firms?

Which action should you take?

Choose only one option

Employee benefits are subject to payroll taxes only if the employee is a partner, not an employee

Certain employee benefits, like health insurance and retirement plan contributions, may be subject to payroll taxes depending on the plan structure

Employee benefits taxation applies only to bonuses, not regular wages

Employee benefits are never taxed and do not need to be reported in payroll

Question 2: How does a law firm accountant handle "write-offs" in bookkeeping?

Which action should you take?

Choose only one option

Write-offs should be recorded as an expense and reflected in the accounts receivable balance

Write-offs should be ignored until the client disputes the debt

Write-offs should be reported as assets until the client pays

Write-offs should be recorded as income adjustments

Question 3: How does a Law Firm Accountant track "budget variances" for legal expenses?

Which action should you take?

Choose only one option

By revising the entire budget when any variance occurs

By ignoring small variances to avoid unnecessary adjustments

By ignoring variances and focusing only on projected income

By comparing actual expenses to the budgeted amounts and analyzing the reasons for variances

Question 4: What is "client trust account reconciliation," and how does it ensure compliance with legal and ethical standards in law firm bookkeeping?

Which action should you take?

Choose only one option

Client trust account reconciliation only affects tax reporting, not client billing

Client trust account reconciliation ensures that client funds are correctly accounted for and segregated from firm operating funds

Client trust account reconciliation applies only to corporate clients

Client trust account reconciliation is unnecessary if there are no discrepancies

Question 5: How should a law firm accountant handle "prepaid expenses" in bookkeeping?

Which action should you take?

Choose only one option

Prepaid expenses should be immediately expensed in full

Prepaid expenses should be recorded as assets and expensed over the duration of the service

Prepaid expenses should be ignored until the service is completed

Prepaid expenses should be recorded as liabilities until used

Question 6: How does a law firm accountant handle "client refunds" in bookkeeping?

Which action should you take?

Choose only one option

By recording the refund as a reduction to the client's balance in the accounts receivable

By recording the refund as income and adjusting client records accordingly

By treating the refund as an expense for the firm

By ignoring client refunds and focusing on new invoices