Peregrine Study Guide Exam Questions and Answers

Peregrine Study Guide Exam Questions and Answers 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. 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.