Peregrine Business Exam 2026 |
Comprehensive Practice Questions &
Verified Answers | Business
Assessment Prep Peregrine Business
Exam 2026 | Comprehensive Practice
Questions & Verified Answers |
Business Assessment Prep
1. Question: When a business erroneously records expenses as
assets, it has violated the measurement issue of:
A. communication
B. classification
C. valuation
D. recognition
Answer: B. classification
2. Question: A dividend will reduce which of the following
accounts?
A. Dividends
B. Retained Earnings
C. Common Stock
D. Accounts Payable
Answer: B. Retained Earnings
3. Question: What is a general ledger?
Answer: A general ledger account is an account or record
, used to sort, store, and summarize a company's transactions.
It includes asset accounts (e.g., Cash, Accounts Receivable),
liability accounts (e.g., Notes Payable, Accounts Payable), and
stockholders' equity accounts (e.g., Common Stock, Retained
Earnings).
4. Question: What is the difference between accounts payable
and accounts receivable?
Answer: Accounts payable is a current liability account,
representing money a company owes to its suppliers.
Accounts receivable is a current asset account, representing
money owed to the company by its customers.
5. Question: Which of these is NOT a cash flow activity
category in the Statement of Cash Flows?
A. operating
B. investing
C. financing
D. depreciating
Answer: D. depreciating
📊 Finance
6. Question: Which statement best describes managerial
planning?
Answer: Setting goals and determining how to achieve
them. Planning establishes direction for the organization.
7. Question: 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 investors be indifferent
between the two bonds?
A. 33.73%
, B. 28.24%
C. 25.98%
D. 42.17%
Answer: A. 33.73%
8. Question: Which of the following statements is CORRECT?
A. 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.
B. After-tax operating income is calculated as EBIT (1 - T) +
Depreciation.
C. Two firms with identical sales and operating costs but with
different amounts of debt and tax rates will have different
operating incomes by definition.
D. If a firm is reporting its income in accordance with
generally accepted accounting principles, then its net income
as reported on the income statement should be equal to its
free cash flow.
Answer: A. 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.
🧠 Economics
9. Question: Government tactics that include removing
incentives, demanding a higher share of profits and taxes,
and confiscating foreign assets are known as:
A. Expropriation
B. Compromises
, C. Obsolescing bargains
D. Conflicting interests
Answer: A. Expropriation
10. Question: "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:
A. Competition
B. Cooperation
C. Collusion
D. Collaboration
Answer: C. Collusion
📈 Strategic Management
11. Question: Strategy is an organization's "game plan" to:
Answer: Create satisfied customers, stay ahead of
competition, achieve performance targets, and develop an
ecosystem that satisfies all stakeholders.
12. Question: Which of the following is NOT a strategic
alternative to laying off employees?
A. implementing a restricted hiring policy
B. downsizing the workforce
C. lowering employment standards
D. mandating reduced hours
Answer: C. lowering employment standards
13. Question: Match the term with its descriptor:
o Vision: an aspirational future state that an organization
desires to be in.
Comprehensive Practice Questions &
Verified Answers | Business
Assessment Prep Peregrine Business
Exam 2026 | Comprehensive Practice
Questions & Verified Answers |
Business Assessment Prep
1. Question: When a business erroneously records expenses as
assets, it has violated the measurement issue of:
A. communication
B. classification
C. valuation
D. recognition
Answer: B. classification
2. Question: A dividend will reduce which of the following
accounts?
A. Dividends
B. Retained Earnings
C. Common Stock
D. Accounts Payable
Answer: B. Retained Earnings
3. Question: What is a general ledger?
Answer: A general ledger account is an account or record
, used to sort, store, and summarize a company's transactions.
It includes asset accounts (e.g., Cash, Accounts Receivable),
liability accounts (e.g., Notes Payable, Accounts Payable), and
stockholders' equity accounts (e.g., Common Stock, Retained
Earnings).
4. Question: What is the difference between accounts payable
and accounts receivable?
Answer: Accounts payable is a current liability account,
representing money a company owes to its suppliers.
Accounts receivable is a current asset account, representing
money owed to the company by its customers.
5. Question: Which of these is NOT a cash flow activity
category in the Statement of Cash Flows?
A. operating
B. investing
C. financing
D. depreciating
Answer: D. depreciating
📊 Finance
6. Question: Which statement best describes managerial
planning?
Answer: Setting goals and determining how to achieve
them. Planning establishes direction for the organization.
7. Question: 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 investors be indifferent
between the two bonds?
A. 33.73%
, B. 28.24%
C. 25.98%
D. 42.17%
Answer: A. 33.73%
8. Question: Which of the following statements is CORRECT?
A. 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.
B. After-tax operating income is calculated as EBIT (1 - T) +
Depreciation.
C. Two firms with identical sales and operating costs but with
different amounts of debt and tax rates will have different
operating incomes by definition.
D. If a firm is reporting its income in accordance with
generally accepted accounting principles, then its net income
as reported on the income statement should be equal to its
free cash flow.
Answer: A. 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.
🧠 Economics
9. Question: Government tactics that include removing
incentives, demanding a higher share of profits and taxes,
and confiscating foreign assets are known as:
A. Expropriation
B. Compromises
, C. Obsolescing bargains
D. Conflicting interests
Answer: A. Expropriation
10. Question: "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:
A. Competition
B. Cooperation
C. Collusion
D. Collaboration
Answer: C. Collusion
📈 Strategic Management
11. Question: Strategy is an organization's "game plan" to:
Answer: Create satisfied customers, stay ahead of
competition, achieve performance targets, and develop an
ecosystem that satisfies all stakeholders.
12. Question: Which of the following is NOT a strategic
alternative to laying off employees?
A. implementing a restricted hiring policy
B. downsizing the workforce
C. lowering employment standards
D. mandating reduced hours
Answer: C. lowering employment standards
13. Question: Match the term with its descriptor:
o Vision: an aspirational future state that an organization
desires to be in.
