Accounting Peregrine
Exam Questions &
Answers
Relevance - ANSWERSThe quality of information that indicates the information makes a
difference in a decision.
Reliability - ANSWERSthe quality of information that gives assurance that it is free of error and
bias
Comparability - ANSWERSAbility to compare the accounting information of different companies
because they use the same accounting principles.
Consistency - ANSWERSuse of the same accounting principles and methods from year to year
within a company
Monetary Unit Assumption - ANSWERSOnly items that be expressed in money are included in
the accounting records
Economic Entity Assumption - ANSWERSevery economic entity can be separately identified and
accounted for
Time Period - ANSWERSThe life of a business is divided into meaningful time periods for
financial reporting
Going Concern Assumption - ANSWERSEntity will continue to operate long enough to recover
the cost of its assets
, Revenue Recognition Principle - ANSWERSa revenue should be recorded when a resource has
been earned
Matching - ANSWERSExpenses are matched with related values in the same accounting period
Cost Principle - ANSWERSA principle that states that acquired assets and services should be
recorded at their actual cost.
Full Disclosure Principle - ANSWERSA company reports details behind financial statements that
would impact users' decisions.
Materiality Constraint - ANSWERSWhether an item was large enough to likely influence the
decision of investor or creditor
Cost-Benefit constraint - ANSWERSonly information with benefits of disclosures greater than the
costs of providing it need be disclosed
Conservatism Principle - ANSWERSthe approach of choosing an accounting method that will
least likely overstate assets and net income
Basic Financial Statements - ANSWERSincome statement, balance sheet, cash flow statement
Assets - ANSWERSresources owned by a business
current assets - ANSWERSitems that can or will be converted into cash within one year
Long-term investments - ANSWERSare generally
Exam Questions &
Answers
Relevance - ANSWERSThe quality of information that indicates the information makes a
difference in a decision.
Reliability - ANSWERSthe quality of information that gives assurance that it is free of error and
bias
Comparability - ANSWERSAbility to compare the accounting information of different companies
because they use the same accounting principles.
Consistency - ANSWERSuse of the same accounting principles and methods from year to year
within a company
Monetary Unit Assumption - ANSWERSOnly items that be expressed in money are included in
the accounting records
Economic Entity Assumption - ANSWERSevery economic entity can be separately identified and
accounted for
Time Period - ANSWERSThe life of a business is divided into meaningful time periods for
financial reporting
Going Concern Assumption - ANSWERSEntity will continue to operate long enough to recover
the cost of its assets
, Revenue Recognition Principle - ANSWERSa revenue should be recorded when a resource has
been earned
Matching - ANSWERSExpenses are matched with related values in the same accounting period
Cost Principle - ANSWERSA principle that states that acquired assets and services should be
recorded at their actual cost.
Full Disclosure Principle - ANSWERSA company reports details behind financial statements that
would impact users' decisions.
Materiality Constraint - ANSWERSWhether an item was large enough to likely influence the
decision of investor or creditor
Cost-Benefit constraint - ANSWERSonly information with benefits of disclosures greater than the
costs of providing it need be disclosed
Conservatism Principle - ANSWERSthe approach of choosing an accounting method that will
least likely overstate assets and net income
Basic Financial Statements - ANSWERSincome statement, balance sheet, cash flow statement
Assets - ANSWERSresources owned by a business
current assets - ANSWERSitems that can or will be converted into cash within one year
Long-term investments - ANSWERSare generally
