PEREGRINE EXAM QUESTIONS AND ANSWERS 100% CORRECTPEREGRINE EXAM QUESTIONS AND ANSWERS 100% CORRECTPEREGRINE EXAM QUESTIONS AND ANSWERS 100% CORRECT
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...
PEREGRINE EXAM QUESTIONS AND
ANSWERS 100% CORRECT
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
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.
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? - ANSWER-The cost of goods sold is the cost of the
products that a retailer, distributor, or manufacturer has sold.
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.
What is principles of accounting? - ANSWER-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? - 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.
, What is meant by reconciling an account? - ANSWER-Reconciling an account is likely
to mean proving or documenting that an account balance is correct.
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
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
Which of the following statements is CORRECT? - ANSWER-Free cash flow (FCF) is,
essentially, the cash flow that is available for interest and dividends after the company
has made the investments in current and fixed assets that are necessary to sustain
ongoing operations.
A corporate bond currently yields 8.3%. Municipal bonds with the same risk, maturity,
and liquidity currently yield 5.5%. At what tax rate would investors be indifferent
between the two bonds? - ANSWER-33.73%
When the costs of supplies increase in an industry, the low-cost leader - ANSWER-be
the only firm able to pay the higher prices and continue to earn average or above-
average returns.
What is the difference between an implicit cost and an explicit cost? - ANSWER-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? - ANSWER-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? - ANSWER-Client Fees
IN TIMES OF RISING PRICES, THE INVENTORY COST METHOD THAT WILL YIELD
THE LOWEST NET INCOME IS: - ANSWER-LIFO (LIFO is the acronym for last-in, first-
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