2023/2024 Peregrine Exam - Questions and Answers
What is a general ledger? - -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 acc...
2023/2024 Peregrine Exam - Questions and Answers
What is a general ledger? - -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? - -
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? - -The cost of goods sold is the cost of the products
that a retailer, distributor, or manufacturer has sold.
What is owner's equity? - -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? - -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? - -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? - -Reconciling an account is likely to mean
proving or documenting that an account balance is correct.
, 2023/2024 Peregrine Exam - Questions and Answers
What is included in cash and cash equivalents? - -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
What is the difference between an implicit cost and an explicit cost? - -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? - -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? - -Client Fees
IN TIMES OF RISING PRICES, THE INVENTORY COST METHOD THAT WILL YIELD THE
LOWEST NET INCOME IS: - -LIFO (LIFO is the acronym for last-in, first-out, which is a
cost flow assumption often used by U.S. corporations in moving costs from inventory to the
cost of goods sold.
Example: Assume that a corporation uses LIFO and has three units of a product in its
inventory. Due to its supplier raising its prices, the corporation purchased the items at
different costs and in the following sequence: $40, $44, and $46. The corporation ships the
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