PGS PEREGRINE GLOBAL SERVICES
MAXE
EST. 2004 Advancing Education Through Assessment
Business Administration Capstone Assessment
PEREGRINE EXAMINATION — COMPREHENSIVE BUSINESS KNOWLEDGE
INSTITUTION PROGRAM
Peregrine Global Services Business Administration Capstone
ASSESSMENT CODE ASSESSMENT TITLE
PEREGRINE-BA-2025 Comprehensive Business Knowledge Assessment
ACADEMIC YEAR EXAM TITLE
2025–2026 Peregrine Business Administration Examination
TOTAL QUESTIONS EXAM FORMAT
50 Multiple Choice — Select the Single Best Answer
General Instructions
▸ Read each question carefully before selecting your answer.
▸ Select the single best answer for each multiple-choice item.
▸ This is a comprehensive capstone assessment covering all core business disciplines.
▸ All questions are weighted equally unless otherwise noted.
▸ No electronic devices, notes, or reference materials are permitted during this examination.
Q MULTIPLE CHOICE QUESTIONS 50 Questions
,1. What is a general ledger?
A. A chronological listing of all company sales transactions
B. An account or record used to sort, store, and summarize a company's transactions
C. A report showing only cash inflows and outflows
D. A list of all customers who owe the company money
CORRECT ANSWER:
B. An account or record used to sort, store, and summarize a company's transactions
RATIONALE:
The general ledger is the master set of accounts that summarizes all transactions occurring within a company. It
includes asset accounts (Cash, Accounts Receivable, Inventory, Investments, Land, Equipment), liability
accounts (Notes Payable, Accounts Payable, Accrued Expenses Payable, Customer Deposits), and stockholders'
equity accounts (Common Stock, Retained Earnings, Treasury Stock, Accumulated Other Comprehensive
Income). Option A describes a sales journal, option C describes a cash flow statement, and option D describes
an accounts receivable aging report.
2. What is the difference between accounts payable and accounts receivable?
A. Both are current asset accounts
B. Accounts payable is a liability (amounts owed to suppliers); accounts receivable is an asset (amounts due from
customers)
C. Accounts payable is an asset; accounts receivable is a liability
D. Both are equity accounts
CORRECT ANSWER:
B. Accounts payable is a liability (amounts owed to suppliers); accounts receivable is an asset (amounts
due from customers)
RATIONALE:
Accounts payable is a current liability account recording amounts a company owes to suppliers for goods or
services received on credit. Accounts receivable is a current asset account recording amounts a company has a
right to collect from customers who received goods or services on credit. Option A and D misclassify both
accounts, and option C reverses the correct classification.
, 3. What is the cost of goods sold?
A. The total revenue generated from product sales
B. The cost of the products that a retailer, distributor, or manufacturer has sold
C. All operating expenses incurred during the accounting period
D. The inventory remaining at the end of the period
CORRECT ANSWER:
B. The cost of the products that a retailer, distributor, or manufacturer has sold
RATIONALE:
Cost of goods sold (COGS) represents the direct costs attributable to the production of goods sold by a
company, including materials and direct labor. It excludes indirect expenses such as distribution costs and sales
force costs. Option A is revenue, option C is operating expenses, and option D is ending inventory — all distinct
from COGS.
4. What is owner's equity?
A. The total liabilities of a business
B. One of the three main sections of a sole proprietorship's balance sheet, represented by the accounting equation
Assets = Liabilities + Owner's Equity
C. Only the cash contributed by the owner
D. The total revenue of the business
CORRECT ANSWER:
B. One of the three main sections of a sole proprietorship's balance sheet, represented by the
accounting equation Assets = Liabilities + Owner's Equity
RATIONALE:
Owner's equity represents the owner's residual interest in the business after deducting liabilities from assets. It
is a fundamental component of the accounting equation. Option A describes liabilities, option C is only one
component (contributed capital), and option D is a separate financial statement element.
MAXE
EST. 2004 Advancing Education Through Assessment
Business Administration Capstone Assessment
PEREGRINE EXAMINATION — COMPREHENSIVE BUSINESS KNOWLEDGE
INSTITUTION PROGRAM
Peregrine Global Services Business Administration Capstone
ASSESSMENT CODE ASSESSMENT TITLE
PEREGRINE-BA-2025 Comprehensive Business Knowledge Assessment
ACADEMIC YEAR EXAM TITLE
2025–2026 Peregrine Business Administration Examination
TOTAL QUESTIONS EXAM FORMAT
50 Multiple Choice — Select the Single Best Answer
General Instructions
▸ Read each question carefully before selecting your answer.
▸ Select the single best answer for each multiple-choice item.
▸ This is a comprehensive capstone assessment covering all core business disciplines.
▸ All questions are weighted equally unless otherwise noted.
▸ No electronic devices, notes, or reference materials are permitted during this examination.
Q MULTIPLE CHOICE QUESTIONS 50 Questions
,1. What is a general ledger?
A. A chronological listing of all company sales transactions
B. An account or record used to sort, store, and summarize a company's transactions
C. A report showing only cash inflows and outflows
D. A list of all customers who owe the company money
CORRECT ANSWER:
B. An account or record used to sort, store, and summarize a company's transactions
RATIONALE:
The general ledger is the master set of accounts that summarizes all transactions occurring within a company. It
includes asset accounts (Cash, Accounts Receivable, Inventory, Investments, Land, Equipment), liability
accounts (Notes Payable, Accounts Payable, Accrued Expenses Payable, Customer Deposits), and stockholders'
equity accounts (Common Stock, Retained Earnings, Treasury Stock, Accumulated Other Comprehensive
Income). Option A describes a sales journal, option C describes a cash flow statement, and option D describes
an accounts receivable aging report.
2. What is the difference between accounts payable and accounts receivable?
A. Both are current asset accounts
B. Accounts payable is a liability (amounts owed to suppliers); accounts receivable is an asset (amounts due from
customers)
C. Accounts payable is an asset; accounts receivable is a liability
D. Both are equity accounts
CORRECT ANSWER:
B. Accounts payable is a liability (amounts owed to suppliers); accounts receivable is an asset (amounts
due from customers)
RATIONALE:
Accounts payable is a current liability account recording amounts a company owes to suppliers for goods or
services received on credit. Accounts receivable is a current asset account recording amounts a company has a
right to collect from customers who received goods or services on credit. Option A and D misclassify both
accounts, and option C reverses the correct classification.
, 3. What is the cost of goods sold?
A. The total revenue generated from product sales
B. The cost of the products that a retailer, distributor, or manufacturer has sold
C. All operating expenses incurred during the accounting period
D. The inventory remaining at the end of the period
CORRECT ANSWER:
B. The cost of the products that a retailer, distributor, or manufacturer has sold
RATIONALE:
Cost of goods sold (COGS) represents the direct costs attributable to the production of goods sold by a
company, including materials and direct labor. It excludes indirect expenses such as distribution costs and sales
force costs. Option A is revenue, option C is operating expenses, and option D is ending inventory — all distinct
from COGS.
4. What is owner's equity?
A. The total liabilities of a business
B. One of the three main sections of a sole proprietorship's balance sheet, represented by the accounting equation
Assets = Liabilities + Owner's Equity
C. Only the cash contributed by the owner
D. The total revenue of the business
CORRECT ANSWER:
B. One of the three main sections of a sole proprietorship's balance sheet, represented by the
accounting equation Assets = Liabilities + Owner's Equity
RATIONALE:
Owner's equity represents the owner's residual interest in the business after deducting liabilities from assets. It
is a fundamental component of the accounting equation. Option A describes liabilities, option C is only one
component (contributed capital), and option D is a separate financial statement element.
