Peregrine Exam, Business Administration Master Exam Overview, MBA 745
Economics, MBA-746 Business Analytics
Study online at https://quizlet.com/_fgsfjy
1. What is a general ledger? A general ledger account is an account or record used
to sort, store and summarize a company's transac-
tions.
asset accounts such as Cash, Accounts Receivable, In-
ventory, Investments, Land, and Equipment
liability accounts including Notes Payable, Accounts
Payable, Accrued Expenses Payable, and Customer De-
posits
stockholders' equity accounts such as Common Stock,
Retained Earnings, Treasury Stock, and Accumulated
Other Comprehensive Income
2. What is the difference between ac- Accounts payable is a current liability account in which
counts payable and accounts re- a company records the amounts it owes to suppliers or
ceivable? vendors for goods or services that it received on credit.
Accounts receivable is a current asset account in which
a company records the amounts it has a right to collect
from customers who received goods or services on
credit.
3. What is the cost of goods sold? The cost of goods sold is the cost of the products that
a retailer, distributor, or manufacturer has sold.
4. What is owner's equity? Owner's equity is one of the three main sections of
a sole proprietorship's balance sheet and one of the
components of the accounting equation: Assets = Lia-
bilities + Owner's Equity.
5. What is principles of accounting?
, Peregrine Exam, Business Administration Master Exam Overview, MBA 745
Economics, MBA-746 Business Analytics
Study online at https://quizlet.com/_fgsfjy
Principles of accounting can also refer to the basic
or fundamental accounting principles: cost principles,
matching principles, full disclosure principles, mate-
riality principles, going concern principles, economic
entity principles, and so on. In this context, princi-
ples of accounting refers to the broad underlying con-
cepts which guide accountants when preparing finan-
cial statements.
6. What is equity? Equity can indicate an ownership interest in a business,
such as stockholders' equity or owner's equity.
Equity can mean an owner's interest in a personal asset.
For example, the owner of a $200,000 house that has a
mortgage loan of $75,000 is said to have $125,000 of
equity in the house.
7. What is meant by reconciling an ac- Reconciling an account is likely to mean proving or
count? documenting that an account balance is correct.
8. What is included in cash and cash In accounting, a company's cash includes the follow-
equivalents? ing:
currency and coins
checks received from customers but not yet deposited
checking accounts
petty cash
Cash equivalents are short-term, highly liquid invest-
ments with a maturity date that was 3 months or less at
the time of purchase.
money market accounts
U.S. Treasury Bills
commercial paper
, Peregrine Exam, Business Administration Master Exam Overview, MBA 745
Economics, MBA-746 Business Analytics
Study online at https://quizlet.com/_fgsfjy
9. What is the difference between an An implicit cost is present but it is not initially shown or
implicit cost and an explicit cost? reported as a separate cost.
An explicit cost is a cost that is present and it is clearly
shown or reported as a separate cost.
10. What is the difference between Stocks, or shares of capital stock, represent an own-
stocks and bonds? ership interest in a corporation. Every corporation has
common stock.
Bonds are a form of long-term debt in which the issu-
ing corporation promises to pay the principal amount
at a specified maturity date.
11. AN INCREASE TO WHICH OF THE Client Fees
FOLLOWING ACCOUNTS WILL IN-
CREASE OWNERS' EQUITY?
12. IN TIMES OF RISING PRICES, THE LIFO (LIFO is the acronym for last-in, first-out, which is a
INVENTORY COST METHOD THAT cost flow assumption often used by U.S. corporations in
WILL YIELD THE LOWEST NET IN- moving costs from inventory to the cost of goods sold.
COME IS: Example: Assume that a corporation uses LIFO and has
three units of a product in its inventory. Due to its sup-
plier raising its prices, the corporation purchased the
items at different costs and in the following sequence:
$40, $44, and $46. The corporation ships the oldest
item (the one purchased for $40) to a customer at a
selling price of $60. However, under the LIFO cost flow
assumption the company reports its cost of goods sold
at $46 (the latest cost) and reports a gross profit of $14.
(The costs of $40 and $44 remain in inventory.)
, Peregrine Exam, Business Administration Master Exam Overview, MBA 745
Economics, MBA-746 Business Analytics
Study online at https://quizlet.com/_fgsfjy
13. When a business erroneously classification
records expenses as assets, it has
violated the measurement issue of
14. A dividend will reduce which of the Retained Earnings
following accounts?
15. Lying by omission involves inten- withholding material facts.
tionally
16. Conflicts of interest exist when em- advance their own interests, those of the organization,
ployees must choose whether to or those of some other group.
17. Which of the following statements Free cash flow (FCF) is, essentially, the cash flow that is
is CORRECT? available for interest and dividends after the company
has made the investments in current and fixed assets
that are necessary to sustain ongoing operations.
18. A corporate bond currently yields 33.73%
8.3%. Municipal bonds with the
same risk, maturity, and liquidity
currently yield 5.5%. At what tax
rate would investors be indifferent
between the two bonds?
19. When the costs of supplies in- be the only firm able to pay the higher prices and
crease in an industry, the low-cost continue to earn average or above- average returns.
leader
20. TQM is most helpful to firms fol- integrated cost-leadership differentiation
lowing the ____ business strategy.
21. Work itself
Economics, MBA-746 Business Analytics
Study online at https://quizlet.com/_fgsfjy
1. What is a general ledger? A general ledger account is an account or record used
to sort, store and summarize a company's transac-
tions.
asset accounts such as Cash, Accounts Receivable, In-
ventory, Investments, Land, and Equipment
liability accounts including Notes Payable, Accounts
Payable, Accrued Expenses Payable, and Customer De-
posits
stockholders' equity accounts such as Common Stock,
Retained Earnings, Treasury Stock, and Accumulated
Other Comprehensive Income
2. What is the difference between ac- Accounts payable is a current liability account in which
counts payable and accounts re- a company records the amounts it owes to suppliers or
ceivable? vendors for goods or services that it received on credit.
Accounts receivable is a current asset account in which
a company records the amounts it has a right to collect
from customers who received goods or services on
credit.
3. What is the cost of goods sold? The cost of goods sold is the cost of the products that
a retailer, distributor, or manufacturer has sold.
4. What is owner's equity? Owner's equity is one of the three main sections of
a sole proprietorship's balance sheet and one of the
components of the accounting equation: Assets = Lia-
bilities + Owner's Equity.
5. What is principles of accounting?
, Peregrine Exam, Business Administration Master Exam Overview, MBA 745
Economics, MBA-746 Business Analytics
Study online at https://quizlet.com/_fgsfjy
Principles of accounting can also refer to the basic
or fundamental accounting principles: cost principles,
matching principles, full disclosure principles, mate-
riality principles, going concern principles, economic
entity principles, and so on. In this context, princi-
ples of accounting refers to the broad underlying con-
cepts which guide accountants when preparing finan-
cial statements.
6. What is equity? Equity can indicate an ownership interest in a business,
such as stockholders' equity or owner's equity.
Equity can mean an owner's interest in a personal asset.
For example, the owner of a $200,000 house that has a
mortgage loan of $75,000 is said to have $125,000 of
equity in the house.
7. What is meant by reconciling an ac- Reconciling an account is likely to mean proving or
count? documenting that an account balance is correct.
8. What is included in cash and cash In accounting, a company's cash includes the follow-
equivalents? ing:
currency and coins
checks received from customers but not yet deposited
checking accounts
petty cash
Cash equivalents are short-term, highly liquid invest-
ments with a maturity date that was 3 months or less at
the time of purchase.
money market accounts
U.S. Treasury Bills
commercial paper
, Peregrine Exam, Business Administration Master Exam Overview, MBA 745
Economics, MBA-746 Business Analytics
Study online at https://quizlet.com/_fgsfjy
9. What is the difference between an An implicit cost is present but it is not initially shown or
implicit cost and an explicit cost? reported as a separate cost.
An explicit cost is a cost that is present and it is clearly
shown or reported as a separate cost.
10. What is the difference between Stocks, or shares of capital stock, represent an own-
stocks and bonds? ership interest in a corporation. Every corporation has
common stock.
Bonds are a form of long-term debt in which the issu-
ing corporation promises to pay the principal amount
at a specified maturity date.
11. AN INCREASE TO WHICH OF THE Client Fees
FOLLOWING ACCOUNTS WILL IN-
CREASE OWNERS' EQUITY?
12. IN TIMES OF RISING PRICES, THE LIFO (LIFO is the acronym for last-in, first-out, which is a
INVENTORY COST METHOD THAT cost flow assumption often used by U.S. corporations in
WILL YIELD THE LOWEST NET IN- moving costs from inventory to the cost of goods sold.
COME IS: Example: Assume that a corporation uses LIFO and has
three units of a product in its inventory. Due to its sup-
plier raising its prices, the corporation purchased the
items at different costs and in the following sequence:
$40, $44, and $46. The corporation ships the oldest
item (the one purchased for $40) to a customer at a
selling price of $60. However, under the LIFO cost flow
assumption the company reports its cost of goods sold
at $46 (the latest cost) and reports a gross profit of $14.
(The costs of $40 and $44 remain in inventory.)
, Peregrine Exam, Business Administration Master Exam Overview, MBA 745
Economics, MBA-746 Business Analytics
Study online at https://quizlet.com/_fgsfjy
13. When a business erroneously classification
records expenses as assets, it has
violated the measurement issue of
14. A dividend will reduce which of the Retained Earnings
following accounts?
15. Lying by omission involves inten- withholding material facts.
tionally
16. Conflicts of interest exist when em- advance their own interests, those of the organization,
ployees must choose whether to or those of some other group.
17. Which of the following statements Free cash flow (FCF) is, essentially, the cash flow that is
is CORRECT? available for interest and dividends after the company
has made the investments in current and fixed assets
that are necessary to sustain ongoing operations.
18. A corporate bond currently yields 33.73%
8.3%. Municipal bonds with the
same risk, maturity, and liquidity
currently yield 5.5%. At what tax
rate would investors be indifferent
between the two bonds?
19. When the costs of supplies in- be the only firm able to pay the higher prices and
crease in an industry, the low-cost continue to earn average or above- average returns.
leader
20. TQM is most helpful to firms fol- integrated cost-leadership differentiation
lowing the ____ business strategy.
21. Work itself
