PEREGRINE EXAM
1. What is a general ledger?
Answer 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
2. What is the difference between accounts payable and accounts receivable?
Answer -
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.
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,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.
3. What is the cost of goods sold?
Answer The cost of goods sold is the cost of the products that a retailer,
distributor, or manufacturer has sold.
4. 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.
5. What is principles of accounting?
Principles of accounting can also refer to the basic or fundamental accounting principles
Answer 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.
6. What is equity?
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, 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.
7. What is meant by reconciling an account?
Answer Reconciling an account is likely to mean proving or
documenting that an account balance is correct.
8. What is included in cash and cash equivalents?
Answer In accounting, a company's cash includes the following
currency and coins
checks received from customers but not yet deposited
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1. What is a general ledger?
Answer 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
2. What is the difference between accounts payable and accounts receivable?
Answer -
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.
1/
20
,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.
3. What is the cost of goods sold?
Answer The cost of goods sold is the cost of the products that a retailer,
distributor, or manufacturer has sold.
4. 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.
5. What is principles of accounting?
Principles of accounting can also refer to the basic or fundamental accounting principles
Answer 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.
6. What is equity?
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20
, 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.
7. What is meant by reconciling an account?
Answer Reconciling an account is likely to mean proving or
documenting that an account balance is correct.
8. What is included in cash and cash equivalents?
Answer In accounting, a company's cash includes the following
currency and coins
checks received from customers but not yet deposited
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20
