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PEREGRINE EXAM QUESTIONS WITH 100% CORRECT ANSWERS
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PEREGRINE EXAM QUESTIONS WITH 100% CORRECT ANSWERS
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ESTUDYPEREGRINE EXAM QUESTIONS WITH 100%
CORRECT ANSWERS
1. **What is a general ledger?**
- A. An account used to record and summarize transactions
- B. A document for storing customer information
- C. A report showing daily sales
- D. A list of employee names
**Answer: A. An account used to record and summarize transactions**
2. **What is the difference between accounts payable and accounts receivable?**
- A. Accounts payable records money owed to suppliers; Accounts receivable records money to be
collected from customers
- B. Accounts payable is for cash payments; Accounts receivable is for cash receipts
- C. Accounts payable tracks sales; Accounts receivable tracks purchases
- D. Accounts payable is a type of equity; Accounts receivable is a type of liability
**Answer: A. Accounts payable records money owed to suppliers; Accounts receivable records money
to be collected from customers**
3. **What is the cost of goods sold?**
- A. The cost of products that have been sold
- B. The cost of products purchased but not yet sold
- C. The cost of advertising and promotions
- D. The cost of utilities and rent
**Answer: A. The cost of products that have been sold**
4. **What is owner's equity?**
- A. The owner's share of the company's assets after liabilities are subtracted
- B. The total amount of cash a company has
- C. The total revenue generated by the company
- D. The company's long-term debts
**Answer: A. The owner's share of the company's assets after liabilities are subtracted**
5. **What are the principles of accounting?**
- A. Basic rules and concepts guiding how financial statements are prepared
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- B. Detailed instructions for preparing tax returns
- C. Steps for conducting a financial audit
- D. Guidelines for personal financial management
**Answer: A. Basic rules and concepts guiding how financial statements are prepared**
6. **What is equity?**
- A. Ownership interest in a business or personal asset value after debts are paid
- B. The amount of money invested in a business
- C. The total liabilities of a company
- D. The company's annual revenue
**Answer: A. Ownership interest in a business or personal asset value after debts are paid**
7. **What does reconciling an account mean?**
- A. Checking and confirming that the account balance is correct
- B. Comparing account balances with bank statements
- C. Closing the account for the fiscal year
- D. Opening a new account for the same purpose
**Answer: A. Checking and confirming that the account balance is correct**
8. **What is included in cash and cash equivalents?**
- A. Currency, coins, checks, checking accounts, petty cash, and short-term investments
- B. Real estate, equipment, and long-term investments
- C. Accounts receivable and inventory
- D. Bonds and stocks
**Answer: A. Currency, coins, checks, checking accounts, petty cash, and short-term investments**
9. **What is the difference between implicit and explicit costs?**
- A. Implicit costs are not directly shown; explicit costs are clearly reported
- B. Implicit costs are reported on the balance sheet; explicit costs are on the income statement
- C. Implicit costs are related to revenue; explicit costs are related to expenses
- D. Implicit costs are fixed; explicit costs are variable
**Answer: A. Implicit costs are not directly shown; explicit costs are clearly reported**
10. **What is the difference between stocks and bonds?**
- A. Stocks represent ownership in a company; bonds represent a loan to a company
- B. Stocks are a type of long-term debt; bonds are equity securities
- C. Stocks pay interest; bonds pay dividends
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- D. Stocks are issued by the government; bonds are issued by corporations
**Answer: A. Stocks represent ownership in a company; bonds represent a loan to a company**
11. **Which account increases owners' equity?**
- A. Client Fees
- B. Accounts Payable
- C. Loans Payable
- D. Rent Expense
**Answer: A. Client Fees**
12. **In times of rising prices, which inventory cost method results in the lowest net income?**
- A. LIFO (Last-In, First-Out)
- B. FIFO (First-In, First-Out)
- C. Weighted Average
- D. Specific Identification
**Answer: A. LIFO (Last-In, First-Out)**
13. **When a business records expenses as assets by mistake, it violates which measurement issue?**
- A. Classification
- B. Recognition
- C. Valuation
- D. Disclosure
**Answer: A. Classification**
14. **Which account is reduced by a dividend?**
- A. Retained Earnings
- B. Cash
- C. Accounts Receivable
- D. Common Stock
**Answer: A. Retained Earnings**
15. **Lying by omission involves intentionally:**
- A. Withholding important information
- B. Providing false information
- C. Misleading with incomplete data
- D. Altering financial records
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**Answer: A. Withholding important information**
16. **Conflicts of interest occur when employees must choose between:**
- A. Their own interests, the organization's interests, or another group's interests
- B. Personal and professional development
- C. Different departments within the company
- D. Various financial investments
**Answer: A. Their own interests, the organization's interests, or another group's interests**
17. **Which statement is correct?**
- A. Free cash flow is cash available for interest and dividends after necessary investments
- B. Free cash flow is the total cash generated by operations
- C. Free cash flow is the same as net income
- D. Free cash flow only includes cash from sales
**Answer: A. Free cash flow is cash available for interest and dividends after necessary investments**
18. **At what tax rate would investors be indifferent between a corporate bond yielding 8.3% and a
municipal bond yielding 5.5%?**
- A. 33.73%
- B. 25.00%
- C. 40.00%
- D. 30.00%
**Answer: A. 33.73%**
19. **When the cost of supplies increases in an industry, the low-cost leader will:**
- A. Be the only firm able to pay higher prices and still earn average or above-average returns
- B. Face bankruptcy due to higher costs
- C. Immediately increase prices to match competitors
- D. Reduce the quality of products to cut costs
**Answer: A. Be the only firm able to pay higher prices and still earn average or above-average
returns**
20. **TQM is most helpful to firms following which business strategy?**
- A. Integrated cost-leadership differentiation
- B. Pure cost leadership
- C. Pure differentiation
- D. Focused differentiation
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