Peregrine Assessment Test Questions and Answers

Peregrine Assessment Test Questions and Answers What is included in cash and cash equivalents? - Answers- 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? - Answers- 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? - Answers- 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? - Answers- Client Fees IN TIMES OF RISING PRICES, THE INVENTORY COST METHOD THAT WILL YIELD THE LOWEST NET INCOME IS: - Answers- LIFO (LIFO is the acronym for last-in, first-out, which is a cost flow assumption often used by U.S. corporations in moving costs from inventory to the cost of goods sold. Example: Assume that a corporation uses LIFO and has three units of a product in its inventory. Due to its supplier 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.) When a business erroneously records expenses as assets, it has violated the measurement issue of - Answers- classification A dividend will reduce which of the following accounts? - Answers- Retained Earnings Lying by omission involves intentionally - Answers- withholding material facts.