PEREGRINE ACCOUNTING AND FINANCE TEST
PAPER 2026 FULL SOLUTION VERIFIED
◉ Companies use blank to help evaluate long-term investments, and
compare alternatives. Answer: Capital investment
◉ Estimated average annual income divided by average investment
equals. Answer: average rate of return
◉ initial cash investment divided by annual net cash flow equals.
Answer: Payback. Period.
◉ Factors that complicate capital investment analysis. Answer: -
income tax
- proposals with unequal lives
- Lease versus capital investment
- Uncertainty
- Changes in price levels
- Qualitative considerations
◉ income statement (profit and loss statement). Answer: starts with
revenue, deduct expense, and finally adds the effects of gains and
losses for a period of time ending with the resulting net income
, ◉ Balance sheet. Answer: reports the resources obligations in claims
of owners on a particular date. Organized to reflect the accounting
equation I E assets, equal to the sum of liabilities and stockholders
equity.
◉ Statement of cash flow. Answer: explains the changes in cash
occurring over the financial statement period. It reports the cash
balance at the beginning of the period sources and uses of cash
during the period and the cash balance at the end of the period.
◉ Statement of Retained Earnings. Answer: changes in retained
earnings over the financial statement period. He reports the retained
earnings balance at the beginning of the period items that increase
or decrease, retained earnings during the period and the retained
earnings balance at the end of the period.
◉ Accounting equation. Answer: Assets = Liabilities + Equity
◉ Stockholder. Answer: An owner of one or more shares of a
corporation
◉ capital stock (stock). Answer: shares of ownership in a
corporation
PAPER 2026 FULL SOLUTION VERIFIED
◉ Companies use blank to help evaluate long-term investments, and
compare alternatives. Answer: Capital investment
◉ Estimated average annual income divided by average investment
equals. Answer: average rate of return
◉ initial cash investment divided by annual net cash flow equals.
Answer: Payback. Period.
◉ Factors that complicate capital investment analysis. Answer: -
income tax
- proposals with unequal lives
- Lease versus capital investment
- Uncertainty
- Changes in price levels
- Qualitative considerations
◉ income statement (profit and loss statement). Answer: starts with
revenue, deduct expense, and finally adds the effects of gains and
losses for a period of time ending with the resulting net income
, ◉ Balance sheet. Answer: reports the resources obligations in claims
of owners on a particular date. Organized to reflect the accounting
equation I E assets, equal to the sum of liabilities and stockholders
equity.
◉ Statement of cash flow. Answer: explains the changes in cash
occurring over the financial statement period. It reports the cash
balance at the beginning of the period sources and uses of cash
during the period and the cash balance at the end of the period.
◉ Statement of Retained Earnings. Answer: changes in retained
earnings over the financial statement period. He reports the retained
earnings balance at the beginning of the period items that increase
or decrease, retained earnings during the period and the retained
earnings balance at the end of the period.
◉ Accounting equation. Answer: Assets = Liabilities + Equity
◉ Stockholder. Answer: An owner of one or more shares of a
corporation
◉ capital stock (stock). Answer: shares of ownership in a
corporation
