PEREGRINE STUDY EXAMS GUIDE ALL QUESTIONS
AND ANSWERS SURE A+
✔✔Common types of financial statements - ✔✔balance sheet
income statement
cash flow
✔✔Balance sheets deal with - ✔✔assets
liabilities
shareholder equity
✔✔Income statements deal with - ✔✔operating, depreciation, net income, earnings per
share
✔✔Cash Flow Statement - ✔✔operating activities, investing activities and financing
✔✔vertical analysis - ✔✔reporting an amount on a financial statement as a percentage
of another item on the same financial statement
, ✔✔horizontal analysis - ✔✔analysis of financial statements that compares account
values reported on these statements over two or more years to identify changes and
trends
✔✔ratio analysis - ✔✔the calculation and interpretation of a financial ratio
✔✔profitability - ✔✔ability to provide financial rewards sufficient to attract and retain
financing
✔✔Liquidity - ✔✔the ease with which an asset can be converted into the economy's
medium of exchange
✔✔leverage - ✔✔the use of borrowed money to supplement existing funds for purposes
of investment
✔✔activity - ✔✔how well a company is utilizing resources
✔✔simple interest - ✔✔interest paid on the principal alone
✔✔Simple Interest Formula - ✔✔rate x principle x number of days= simple interest
✔✔compound interest - ✔✔interest earned on both the principal amount and any
interest already earned
✔✔Compound Interest Formula - ✔✔A=P(1+r/n)^nt
✔✔taxable income - ✔✔income on which tax must be paid; total income minus
exemptions and deductions
✔✔tax exempt - ✔✔not subject to tax by federal or state governments
✔✔Initial loan - ✔✔debt on cash account and credit either short term debt or long term
✔✔interest payments - ✔✔A payment that repays interest on a loan, bond etc, rather
than paying off any of the original amount
✔✔mixed debt - ✔✔includes both interest expense and loan repayment
✔✔final debt - ✔✔last payment of debt
✔✔Journal Entry - ✔✔an accounting method for expressing the effects of a transaction
on accounts in a debits-equal-credits format
debt and credit must be equal
AND ANSWERS SURE A+
✔✔Common types of financial statements - ✔✔balance sheet
income statement
cash flow
✔✔Balance sheets deal with - ✔✔assets
liabilities
shareholder equity
✔✔Income statements deal with - ✔✔operating, depreciation, net income, earnings per
share
✔✔Cash Flow Statement - ✔✔operating activities, investing activities and financing
✔✔vertical analysis - ✔✔reporting an amount on a financial statement as a percentage
of another item on the same financial statement
, ✔✔horizontal analysis - ✔✔analysis of financial statements that compares account
values reported on these statements over two or more years to identify changes and
trends
✔✔ratio analysis - ✔✔the calculation and interpretation of a financial ratio
✔✔profitability - ✔✔ability to provide financial rewards sufficient to attract and retain
financing
✔✔Liquidity - ✔✔the ease with which an asset can be converted into the economy's
medium of exchange
✔✔leverage - ✔✔the use of borrowed money to supplement existing funds for purposes
of investment
✔✔activity - ✔✔how well a company is utilizing resources
✔✔simple interest - ✔✔interest paid on the principal alone
✔✔Simple Interest Formula - ✔✔rate x principle x number of days= simple interest
✔✔compound interest - ✔✔interest earned on both the principal amount and any
interest already earned
✔✔Compound Interest Formula - ✔✔A=P(1+r/n)^nt
✔✔taxable income - ✔✔income on which tax must be paid; total income minus
exemptions and deductions
✔✔tax exempt - ✔✔not subject to tax by federal or state governments
✔✔Initial loan - ✔✔debt on cash account and credit either short term debt or long term
✔✔interest payments - ✔✔A payment that repays interest on a loan, bond etc, rather
than paying off any of the original amount
✔✔mixed debt - ✔✔includes both interest expense and loan repayment
✔✔final debt - ✔✔last payment of debt
✔✔Journal Entry - ✔✔an accounting method for expressing the effects of a transaction
on accounts in a debits-equal-credits format
debt and credit must be equal
