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ACCOUNTING PEREGRINE EXAM QUESTIONS WITH 100% CORRECT ANSWERS
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ACCOUNTING PEREGRINE EXAM QUESTIONS WITH 100% CORRECT ANSWERS
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ESTUDYACCOUNTING PEREGRINE EXAM QUESTIONS
WITH 100% CORRECT ANSWERS
1. **What does relevance mean in financial information?**
- A. The quality of information that makes a difference in a decision
- B. The quality of information that is free of error
- C. The ability to compare information across companies
- D. The use of the same methods year to year
**Answer: A. The quality of information that makes a difference in a decision**
2. **What does reliability refer to in financial information?**
- A. Assurance that information is free of error and bias
- B. Ability to compare financial data of different companies
- C. Use of consistent accounting principles
- D. Information on the company’s future plans
**Answer: A. Assurance that information is free of error and bias**
3. **What is comparability in financial reporting?**
- A. Ability to compare the accounting information of different companies using the same principles
- B. Ability to analyze financial data within the same company
- C. Use of varied accounting methods to suit different needs
- D. Consistency in reporting across different periods
**Answer: A. Ability to compare the accounting information of different companies using the same
principles**
4. **What does consistency mean in accounting?**
- A. Use of the same accounting principles and methods from year to year within a company
- B. Changing accounting methods frequently
- C. Comparing financial statements of different companies
- D. Reporting financial information in a timely manner
**Answer: A. Use of the same accounting principles and methods from year to year within a
company**
5. **What is the Monetary Unit Assumption?**
, ESTUDY
- A. Only items that can be expressed in money are included in the accounting records
- B. All assets are recorded at market value
- C. The value of currency is adjusted for inflation
- D. Non-monetary items are excluded from the records
**Answer: A. Only items that can be expressed in money are included in the accounting records**
6. **What does the Economic Entity Assumption state?**
- A. Every economic entity can be separately identified and accounted for
- B. All financial activities are reported in one account
- C. Assets and liabilities of different companies are combined
- D. Financial information is reported by fiscal year
**Answer: A. Every economic entity can be separately identified and accounted for**
7. **What is the Time Period assumption?**
- A. The life of a business is divided into meaningful time periods for financial reporting
- B. Financial statements are reported annually
- C. The business operates indefinitely
- D. All financial transactions are recorded on a monthly basis
**Answer: A. The life of a business is divided into meaningful time periods for financial reporting**
8. **What does the Going Concern Assumption imply?**
- A. The entity will continue to operate long enough to recover the cost of its assets
- B. The business will close its operations within a year
- C. The company will cease operations immediately
- D. The business is only concerned with short-term profitability
**Answer: A. The entity will continue to operate long enough to recover the cost of its assets**
9. **When should revenue be recorded according to the Revenue Recognition Principle?**
- A. When a resource has been earned
- B. When cash is received
- C. At the end of the fiscal year
- D. When the payment is made
**Answer: A. When a resource has been earned**
10. **What does Matching refer to in accounting?**
- A. Expenses are matched with related revenues in the same accounting period
- B. Recording expenses as soon as they are incurred
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