FOUNDATIONS OF ACCOUNTING PEREGRINE
GLOBAL 2026 EXAM PREPARATION PACK KEY
DEBITS AND CREDITS LEDGER SYSTEMS AND
SAMPLE QUESTIONS
◉ Accounts Receivable Turnover Ratio. Answer: net credit
sales/average net accounts receivable
◉ number of days' sales in receivables. Answer: Average Accounts
Receivable / Average Daily Sales
◉ Inventory turnover ratio. Answer: cost of goods sold/average
inventory
◉ Ratio fixed assets to long-term liabilities. Answer: ratio of fixed
assets to long-term liabilities is a solvency measure that indicates
the margin of safety for node holders and bond holders. It also
indicates the ability of a business to borrow additional funds on a
long-term basis.
◉ Ratio of liabilities to stockholders equity. Answer: Claims against
the total assets of a business are divided into two groups, one claims
of creditors and two claims of owners. The relationship between the
,total claims of the creditors and owners is a solvency measure that
indicates the margin of safety for creditors.
◉ Time Interest Earned. Answer: The higher, the ratio, the lower, the
risk that interest payments will not be made, if earnings decrease.
Dividing the sum of the income before taxes and interest expense.
◉ Profitability and market analysis. Answer: Profitability analysis
focuses, primarily on the relationship between operating results as
reported in the income, statement and resources available to the
business as reported on the balance sheet. Market analysis focuses
on how well a company is doing from the financial markets
perspective.
◉ Return on Sales. Answer: The ratio of net income to net sales is a
profitability measure that is often called the net profit margin. The
ratio shows how much of each dollar and sales flows through the net
income after all expenses are subtracted.
◉ Return on Assets Ratio. Answer: The return on assets is computed
by adding interest, expense to net income, and dividing the sum by
the average total assets.
◉ Return on stockholders equity. Answer: Dividing net income by
average total stockholders equity
, ◉ Leverage. Answer: Difference in the rate of return on stockholders
equity, and the rate of return on assets.
◉ Return on common equity ratio. Answer: subtracting preferred
dividend requirements, from net income, and dividing this amount
by average common stockholders equity
◉ Earnings per share. Answer: net income - preferred dividends /
weighted average common shares outstanding
◉ Price earnings ratio. Answer: Dividing the market price per share
of common stock at a specific date by the annual earnings per share
◉ Dividends per share. Answer: Dividing the dividends, distributed
to common stockholders during the period by the number of
common shares, outstanding
◉ Dividend yield. Answer: Dividing the annual dividends, paid per
share of common stock by the market price per share on a specific
date
◉ a percentage analysis that is used to show the relationship of each
component to the total within a single statement is a. Answer:
Vertical analysis
GLOBAL 2026 EXAM PREPARATION PACK KEY
DEBITS AND CREDITS LEDGER SYSTEMS AND
SAMPLE QUESTIONS
◉ Accounts Receivable Turnover Ratio. Answer: net credit
sales/average net accounts receivable
◉ number of days' sales in receivables. Answer: Average Accounts
Receivable / Average Daily Sales
◉ Inventory turnover ratio. Answer: cost of goods sold/average
inventory
◉ Ratio fixed assets to long-term liabilities. Answer: ratio of fixed
assets to long-term liabilities is a solvency measure that indicates
the margin of safety for node holders and bond holders. It also
indicates the ability of a business to borrow additional funds on a
long-term basis.
◉ Ratio of liabilities to stockholders equity. Answer: Claims against
the total assets of a business are divided into two groups, one claims
of creditors and two claims of owners. The relationship between the
,total claims of the creditors and owners is a solvency measure that
indicates the margin of safety for creditors.
◉ Time Interest Earned. Answer: The higher, the ratio, the lower, the
risk that interest payments will not be made, if earnings decrease.
Dividing the sum of the income before taxes and interest expense.
◉ Profitability and market analysis. Answer: Profitability analysis
focuses, primarily on the relationship between operating results as
reported in the income, statement and resources available to the
business as reported on the balance sheet. Market analysis focuses
on how well a company is doing from the financial markets
perspective.
◉ Return on Sales. Answer: The ratio of net income to net sales is a
profitability measure that is often called the net profit margin. The
ratio shows how much of each dollar and sales flows through the net
income after all expenses are subtracted.
◉ Return on Assets Ratio. Answer: The return on assets is computed
by adding interest, expense to net income, and dividing the sum by
the average total assets.
◉ Return on stockholders equity. Answer: Dividing net income by
average total stockholders equity
, ◉ Leverage. Answer: Difference in the rate of return on stockholders
equity, and the rate of return on assets.
◉ Return on common equity ratio. Answer: subtracting preferred
dividend requirements, from net income, and dividing this amount
by average common stockholders equity
◉ Earnings per share. Answer: net income - preferred dividends /
weighted average common shares outstanding
◉ Price earnings ratio. Answer: Dividing the market price per share
of common stock at a specific date by the annual earnings per share
◉ Dividends per share. Answer: Dividing the dividends, distributed
to common stockholders during the period by the number of
common shares, outstanding
◉ Dividend yield. Answer: Dividing the annual dividends, paid per
share of common stock by the market price per share on a specific
date
◉ a percentage analysis that is used to show the relationship of each
component to the total within a single statement is a. Answer:
Vertical analysis
