Peregrine Business Exam 2026 Prep Pack
Exam Overview
The Peregrine Business Administration Comprehensive Exam is used by ACBSP-
accredited business programs for outcomes assessment. Key features:
Format: Multiple-choice, 4-hour time limit
Passing Score: Typically 80%
Domains Covered: Accounting (15-20%), Finance (15-20%), Management (15-
20%), Marketing (15-20%), Economics (15-20%), Business Integration & Strategy
(15-20%)
Section 1: Accounting (Questions 1-25)
1. Which financial statement reports a company's financial position at a specific
point in time (e.g., December 31)?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
,D. Statement of Retained Earnings
Correct Answer: C
Rationale: The balance sheet presents assets, liabilities, and equity at a specific
date. The income statement reports performance over a period; the cash flow
statement reports cash inflows and outflows over a period.
2. The accounting equation is:
A. Assets = Liabilities – Equity
B. Assets = Liabilities + Equity
C. Assets – Liabilities = Revenues
D. Liabilities = Assets + Equity
Correct Answer: B
Rationale: This fundamental equation must always balance. Assets are what the
company owns; liabilities are debts; owners' equity is the residual claim.
,3. When a business erroneously records expenses as assets, it has violated the
measurement issue of:
A. Communication
B. Classification
C. Valuation
D. Recognition
Correct Answer: B
Rationale: This is a fundamental classification error. Expenses are part of a
company's day-to-day costs and belong on the income statement. Assets are
resources with future economic value and belong on the balance sheet. Mixing
them up violates the classification issue.
4. A dividend will reduce which of the following accounts?
A. Dividends Payable
B. Retained Earnings
C. Common Stock
, D. Accounts Payable
Correct Answer: B
Rationale: Dividends are a distribution of a company's accumulated profits to
shareholders. These profits are tracked in the Retained Earnings account within
the shareholders' equity section of the balance sheet. Therefore, paying a
dividend directly reduces Retained Earnings.
5. Which of the following is classified as a current asset?
A. Land
B. Patents
C. Inventory
D. Bonds Payable
Correct Answer: C
Exam Overview
The Peregrine Business Administration Comprehensive Exam is used by ACBSP-
accredited business programs for outcomes assessment. Key features:
Format: Multiple-choice, 4-hour time limit
Passing Score: Typically 80%
Domains Covered: Accounting (15-20%), Finance (15-20%), Management (15-
20%), Marketing (15-20%), Economics (15-20%), Business Integration & Strategy
(15-20%)
Section 1: Accounting (Questions 1-25)
1. Which financial statement reports a company's financial position at a specific
point in time (e.g., December 31)?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
,D. Statement of Retained Earnings
Correct Answer: C
Rationale: The balance sheet presents assets, liabilities, and equity at a specific
date. The income statement reports performance over a period; the cash flow
statement reports cash inflows and outflows over a period.
2. The accounting equation is:
A. Assets = Liabilities – Equity
B. Assets = Liabilities + Equity
C. Assets – Liabilities = Revenues
D. Liabilities = Assets + Equity
Correct Answer: B
Rationale: This fundamental equation must always balance. Assets are what the
company owns; liabilities are debts; owners' equity is the residual claim.
,3. When a business erroneously records expenses as assets, it has violated the
measurement issue of:
A. Communication
B. Classification
C. Valuation
D. Recognition
Correct Answer: B
Rationale: This is a fundamental classification error. Expenses are part of a
company's day-to-day costs and belong on the income statement. Assets are
resources with future economic value and belong on the balance sheet. Mixing
them up violates the classification issue.
4. A dividend will reduce which of the following accounts?
A. Dividends Payable
B. Retained Earnings
C. Common Stock
, D. Accounts Payable
Correct Answer: B
Rationale: Dividends are a distribution of a company's accumulated profits to
shareholders. These profits are tracked in the Retained Earnings account within
the shareholders' equity section of the balance sheet. Therefore, paying a
dividend directly reduces Retained Earnings.
5. Which of the following is classified as a current asset?
A. Land
B. Patents
C. Inventory
D. Bonds Payable
Correct Answer: C
