Peregrine Exam Questions With 100% Verified Answers
Graded A+
What is a general ledger?
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
What is the difference between accounts payable and accounts receivable?
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?
The cost of goods sold is the cost of the products that a retailer, distributor, or
manufacturer has sold.
What is owner's equity?
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?
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?
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?
Reconciling an account is likely to mean proving or documenting that an account
balance is correct.
What is included in cash and cash equivalents?
, 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?
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?
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?
Client Fees
IN TIMES OF RISING PRICES, THE INVENTORY COST METHOD THAT WILL YIELD
THE LOWEST NET INCOME IS:
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
classification
A dividend will reduce which of the following accounts?
Retained Earnings
Lying by omission involves intentionally
withholding material facts.
Conflicts of interest exist when employees must choose whether to
advance their own interests, those of the organization, or those of some other group.
Which of the following statements is CORRECT?
Graded A+
What is a general ledger?
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
What is the difference between accounts payable and accounts receivable?
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?
The cost of goods sold is the cost of the products that a retailer, distributor, or
manufacturer has sold.
What is owner's equity?
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?
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?
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?
Reconciling an account is likely to mean proving or documenting that an account
balance is correct.
What is included in cash and cash equivalents?
, 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?
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?
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?
Client Fees
IN TIMES OF RISING PRICES, THE INVENTORY COST METHOD THAT WILL YIELD
THE LOWEST NET INCOME IS:
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
classification
A dividend will reduce which of the following accounts?
Retained Earnings
Lying by omission involves intentionally
withholding material facts.
Conflicts of interest exist when employees must choose whether to
advance their own interests, those of the organization, or those of some other group.
Which of the following statements is CORRECT?
