Page 1 of 109
PEREGRINE EXAM / QUESTIONS AND VERIFIED
ANSWERS | 100% CORRECT | GRADE A (2025
UPDATE)
What is a general ledger? .....ANSWER.....A general ledger
account is an account or record used to sort, store and summarize
a company's transactions.
asset accounts such as Cash, Accounts Receivable, Inventory,
Investments, Land, and Equipment
liability accounts including Notes Payable, Accounts Payable,
Accrued Expenses Payable, and Customer Deposits
stockholders' equity accounts such as Common Stock, Retained
Earnings, Treasury Stock, and Accumulated Other Comprehensive
Income
,Page 2 of 109
What is the difference between accounts payable and accounts
receivable? .....ANSWER.....Accounts payable is a current liability
account in which a company records the amounts it owes to
suppliers or 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.
What is the cost of goods sold? .....ANSWER.....The cost of goods
sold is the cost of the products that a retailer, distributor, or
manufacturer has sold.
What is owner's equity? .....ANSWER.....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 =
Liabilities + Owner's Equity.
,Page 3 of 109
What is principles of accounting? .....ANSWER.....Principles of
accounting can also refer to the basic or fundamental accounting
principles: cost principles, matching principles, full disclosure
principles, materiality principles, going concern principles,
economic entity principles, and so on. In this context, principles of
accounting refers to the broad underlying concepts which guide
accountants when preparing financial statements.
What is equity? .....ANSWER.....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.
What is meant by reconciling an account?
.....ANSWER.....Reconciling an account is likely to mean proving or
documenting that an account balance is correct.
, Page 4 of 109
What is included in cash and cash equivalents? .....ANSWER.....In
accounting, a company's cash includes the following:
currency and coins
checks received from customers but not yet deposited
checking accounts
petty cash
Cash equivalents are short-term, highly liquid investments 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 / QUESTIONS AND VERIFIED
ANSWERS | 100% CORRECT | GRADE A (2025
UPDATE)
What is a general ledger? .....ANSWER.....A general ledger
account is an account or record used to sort, store and summarize
a company's transactions.
asset accounts such as Cash, Accounts Receivable, Inventory,
Investments, Land, and Equipment
liability accounts including Notes Payable, Accounts Payable,
Accrued Expenses Payable, and Customer Deposits
stockholders' equity accounts such as Common Stock, Retained
Earnings, Treasury Stock, and Accumulated Other Comprehensive
Income
,Page 2 of 109
What is the difference between accounts payable and accounts
receivable? .....ANSWER.....Accounts payable is a current liability
account in which a company records the amounts it owes to
suppliers or 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.
What is the cost of goods sold? .....ANSWER.....The cost of goods
sold is the cost of the products that a retailer, distributor, or
manufacturer has sold.
What is owner's equity? .....ANSWER.....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 =
Liabilities + Owner's Equity.
,Page 3 of 109
What is principles of accounting? .....ANSWER.....Principles of
accounting can also refer to the basic or fundamental accounting
principles: cost principles, matching principles, full disclosure
principles, materiality principles, going concern principles,
economic entity principles, and so on. In this context, principles of
accounting refers to the broad underlying concepts which guide
accountants when preparing financial statements.
What is equity? .....ANSWER.....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.
What is meant by reconciling an account?
.....ANSWER.....Reconciling an account is likely to mean proving or
documenting that an account balance is correct.
, Page 4 of 109
What is included in cash and cash equivalents? .....ANSWER.....In
accounting, a company's cash includes the following:
currency and coins
checks received from customers but not yet deposited
checking accounts
petty cash
Cash equivalents are short-term, highly liquid investments with a
maturity date that was 3 months or less at the time of purchase.
money market accounts
U.S. Treasury Bills
commercial paper
