ACCOUNTING PEREGRINE EXAM
QUESTIONS & VERIFIED CORRECT
ANSWERS PASSED 100%
Relevance - Correct Answer ✔✔ The quality of information that indicates the
information makes a difference in a decision.
Reliability - Correct Answer ✔✔ the quality of information that gives assurance that it is
free of error and bias
Comparability - Correct Answer ✔✔ Ability to compare the accounting information of
different companies because they use the same accounting principles.
Consistency - Correct Answer ✔✔ use of the same accounting principles and methods
from year to year within a company
Monetary Unit Assumption - Correct Answer ✔✔ Only items that be expressed in
money are included in the accounting records
Economic Entity Assumption - Correct Answer ✔✔ every economic entity can be
separately identified and accounted for
Time Period - Correct Answer ✔✔ The life of a business is divided into meaningful time
periods for financial reporting
Going Concern Assumption - Correct Answer ✔✔ Entity will continue to operate long
enough to recover the cost of its assets
Revenue Recognition Principle - Correct Answer ✔✔ a revenue should be recorded
when a resource has been earned
Matching - Correct Answer ✔✔ Expenses are matched with related values in the same
accounting period
Cost Principle - Correct Answer ✔✔ A principle that states that acquired assets and
services should be recorded at their actual cost.
Full Disclosure Principle - Correct Answer ✔✔ A company reports details behind
financial statements that would impact users' decisions.
Materiality Constraint - Correct Answer ✔✔ Whether an item was large enough to likely
influence the decision of investor or creditor
, Cost-Benefit constraint - Correct Answer ✔✔ only information with benefits of
disclosures greater than the costs of providing it need be disclosed
Conservatism Principle - Correct Answer ✔✔ the approach of choosing an accounting
method that will least likely overstate assets and net income
Basic Financial Statements - Correct Answer ✔✔ income statement, balance sheet,
cash flow statement
Assets - Correct Answer ✔✔ resources owned by a business
current assets - Correct Answer ✔✔ items that can or will be converted into cash within
one year
Long-term investments - Correct Answer ✔✔ are generally
(1) investments in stocks and bonds of other corporations that are held for more than
one year,
(2) long-term assets such as land or buildings that a company is not currently using in
its operating activities, and
(3) long-term notes receivable.
Property, Plant, and Equipment - Correct Answer ✔✔ assets with relatively long useful
lives that are currently used in operating the business
Intangible assets - Correct Answer ✔✔ Are assets that do not have physical substance
yet often are very valuable
Liabilities - Correct Answer ✔✔ Debts and obligations of a business
Equity - Correct Answer ✔✔ the owner's claims to the assets of the business
Common Stock - Correct Answer ✔✔ investments of assets into the business by the
stockholders
Retained Earnings - Correct Answer ✔✔ income retained for use in the business
horizontal analysis (trend analysis) - Correct Answer ✔✔ a technique for evaluating a
series of financial statement data over a period of time
Vertical analysis (common-size) - Correct Answer ✔✔ technique for evaluating financial
statement data
ratio analysis - Correct Answer ✔✔ expresses the relationship among selected items of
financial statement data
QUESTIONS & VERIFIED CORRECT
ANSWERS PASSED 100%
Relevance - Correct Answer ✔✔ The quality of information that indicates the
information makes a difference in a decision.
Reliability - Correct Answer ✔✔ the quality of information that gives assurance that it is
free of error and bias
Comparability - Correct Answer ✔✔ Ability to compare the accounting information of
different companies because they use the same accounting principles.
Consistency - Correct Answer ✔✔ use of the same accounting principles and methods
from year to year within a company
Monetary Unit Assumption - Correct Answer ✔✔ Only items that be expressed in
money are included in the accounting records
Economic Entity Assumption - Correct Answer ✔✔ every economic entity can be
separately identified and accounted for
Time Period - Correct Answer ✔✔ The life of a business is divided into meaningful time
periods for financial reporting
Going Concern Assumption - Correct Answer ✔✔ Entity will continue to operate long
enough to recover the cost of its assets
Revenue Recognition Principle - Correct Answer ✔✔ a revenue should be recorded
when a resource has been earned
Matching - Correct Answer ✔✔ Expenses are matched with related values in the same
accounting period
Cost Principle - Correct Answer ✔✔ A principle that states that acquired assets and
services should be recorded at their actual cost.
Full Disclosure Principle - Correct Answer ✔✔ A company reports details behind
financial statements that would impact users' decisions.
Materiality Constraint - Correct Answer ✔✔ Whether an item was large enough to likely
influence the decision of investor or creditor
, Cost-Benefit constraint - Correct Answer ✔✔ only information with benefits of
disclosures greater than the costs of providing it need be disclosed
Conservatism Principle - Correct Answer ✔✔ the approach of choosing an accounting
method that will least likely overstate assets and net income
Basic Financial Statements - Correct Answer ✔✔ income statement, balance sheet,
cash flow statement
Assets - Correct Answer ✔✔ resources owned by a business
current assets - Correct Answer ✔✔ items that can or will be converted into cash within
one year
Long-term investments - Correct Answer ✔✔ are generally
(1) investments in stocks and bonds of other corporations that are held for more than
one year,
(2) long-term assets such as land or buildings that a company is not currently using in
its operating activities, and
(3) long-term notes receivable.
Property, Plant, and Equipment - Correct Answer ✔✔ assets with relatively long useful
lives that are currently used in operating the business
Intangible assets - Correct Answer ✔✔ Are assets that do not have physical substance
yet often are very valuable
Liabilities - Correct Answer ✔✔ Debts and obligations of a business
Equity - Correct Answer ✔✔ the owner's claims to the assets of the business
Common Stock - Correct Answer ✔✔ investments of assets into the business by the
stockholders
Retained Earnings - Correct Answer ✔✔ income retained for use in the business
horizontal analysis (trend analysis) - Correct Answer ✔✔ a technique for evaluating a
series of financial statement data over a period of time
Vertical analysis (common-size) - Correct Answer ✔✔ technique for evaluating financial
statement data
ratio analysis - Correct Answer ✔✔ expresses the relationship among selected items of
financial statement data
