PEREGRINE COMPREHENSIVE EXAMINATION
TEST 2026 QUESTIONS AND VERIFIED
SOLUTIONS GUARANTEED SUCCESS
◉ 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.
◉ 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
◉ What is the difference between an implicit cost and an explicit
cost? Answer: An implicit cost is present but it is not initially shown
or 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.
◉ What is the difference between stocks and bonds? Answer: Stocks,
or shares of capital stock, represent an ownership interest in a
corporation. Every corporation has common stock.
Bonds are a form of long-term debt in which the issuing corporation
promises to pay the principal amount at a specified maturity date.
◉ AN INCREASE TO WHICH OF THE FOLLOWING ACCOUNTS WILL
INCREASE OWNERS' EQUITY? Answer: Client Fees
◉ IN TIMES OF RISING PRICES, THE INVENTORY COST METHOD
THAT WILL YIELD THE LOWEST NET INCOME IS: Answer: LIFO
TEST 2026 QUESTIONS AND VERIFIED
SOLUTIONS GUARANTEED SUCCESS
◉ 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.
◉ 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
◉ What is the difference between an implicit cost and an explicit
cost? Answer: An implicit cost is present but it is not initially shown
or 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.
◉ What is the difference between stocks and bonds? Answer: Stocks,
or shares of capital stock, represent an ownership interest in a
corporation. Every corporation has common stock.
Bonds are a form of long-term debt in which the issuing corporation
promises to pay the principal amount at a specified maturity date.
◉ AN INCREASE TO WHICH OF THE FOLLOWING ACCOUNTS WILL
INCREASE OWNERS' EQUITY? Answer: Client Fees
◉ IN TIMES OF RISING PRICES, THE INVENTORY COST METHOD
THAT WILL YIELD THE LOWEST NET INCOME IS: Answer: LIFO
