Peregrine Exam Practice Questions and Answers 2024

Peregrine Exam Practice Questions and Answers 2024 1. 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 2. 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. 3. 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. 4. 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. 5. 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 en- tity principles, and so on. In this context, principles of accounting refers to the broad underlying concepts which guide accountants when preparing financial statements. 6. 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. 7. What is meant by reconciling an account?: Reconciling an account is likely to mean proving or documenting that an account balance is correct. 8. 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 9. 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. 10. 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. 11. AN INCREASE TO WHICH OF THE FOLLOWING ACCOUNTS WILL IN- CREASE OWNERS' EQUITY?: Client Fees 12. 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 oldest item (the one purchased for $40) to a customer at a selling price of $60. However, under the LIFO cost flow assumption the company reports its cost of goods sold at $46 (the latest cost) and reports a gross profit of $14. (The costs of $40 and $44 remain in inventory.) 13. When a business erroneously records expenses as assets, it has violated the measurement issue of: classification 14. A dividend will reduce which of the following accounts?: Retained Earnings 15. Lying by omission involves intentionally: withholding material facts. 16. Conflicts of interest exist when employees must choose whether to: ad- vance their own interests, those of the organization, or those of some other group. 17. Which of the following statements is CORRECT?: 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. 18. 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 in- vestors be indifferent between the two bonds?: 33.73% 19. When the costs of supplies increase in an industry, the low-cost leader: be the only firm able to pay the higher prices and continue to earn average or above- average returns. 20. TQM is most helpful to firms following the business strategy.: integrat- ed cost-leadership differentiation 21. All of the following are considered extrinsic motivators in Herzberg's two-factor theory EXCEPT:: Work itself 22. Which of the following is NOT one of the process motivation theories?: - Acquired needs theory 23. An individual who purchases a computer later decides to acquire a new motherboard. In terms of computing GDP, this new motherboard would be a(n): Final good 24. The largest component of GDP is: consumption 25. In economics, firms are assumed to: Maximize profits 26. Holding everything else equal, total revenue increases: when either price or quantity increase 27. Government tactics that include removing incentives, demanding a higher share of profits and taxes, and confiscating foreign assets are known as:: Ex- propriation 28. "People of the same trade seldom meet together, even for merriment and diversion, but their conversation often ends in conspiracy against the public." This quote from Adam Smith is referring to which of the following business relationship terms:: Collusion 29. is a collection of facts organized so that they have additional value beyond the value of the facts themselves.: Information 30. is the simulation of a real or imagined environment that can be experienced visually in three dimensions.: Virtual reality 31. The Federal Highway Administration uses notice-and-comment rulemak- ing.This process begins with: the publication of a notice of proposed rulemaking. 32. Kip opens an account at a Lotsa Goodies Store, and buys a digital music player and other items, but makes no payments on the account.