Accounting Peregrine Exam|Complete
Questions With 100% Verified Answers
Relevance
The quality of information that indicates the information makes a difference in a decision.
Reliability
the quality of information that gives assurance that it is free of error and bias
Comparability
Ability to compare the accounting information of different companies because they use the same
accounting principles.
Consistency
use of the same accounting principles and methods from year to year within a company
Monetary Unit Assumption
Only items that be expressed in money are included in the accounting records
Economic Entity Assumption
every economic entity can be separately identified and accounted for
Time Period
The life of a business is divided into meaningful time periods for financial reporting
Going Concern Assumption
Entity will continue to operate long enough to recover the cost of its assets
Revenue Recognition Principle
a revenue should be recorded when a resource has been earned
Matching
Expenses are matched with related values in the same accounting period
Cost Principle
A principle that states that acquired assets and services should be recorded at their actual cost.
Full Disclosure Principle
A company reports details behind financial statements that would impact users' decisions.
Materiality Constraint
Whether an item was large enough to likely influence the decision of investor or creditor
Cost-Benefit constraint
, only information with benefits of disclosures greater than the costs of providing it need be disclosed
Conservatism Principle
the approach of choosing an accounting method that will least likely overstate assets and net income
Basic Financial Statements
income statement, balance sheet, cash flow statement
Assets
resources owned by a business
current assets
items that can or will be converted into cash within one year
Long-term investments
are generally
(1) investments in stocks and bonds of other corporations that are held for more than one year,
(2) long-term assets such as land or buildings that a company is not currently using in its operating
activities, and
(3) long-term notes receivable.
Property, Plant, and Equipment
assets with relatively long useful lives that are currently used in operating the business
Intangible assets
Are assets that do not have physical substance yet often are very valuable
Liabilities
Debts and obligations of a business
Equity
the owner's claims to the assets of the business
Common Stock
investments of assets into the business by the stockholders
Retained Earnings
income retained for use in the business
horizontal analysis (trend analysis)
a technique for evaluating a series of financial statement data over a period of time
Vertical analysis (common-size)
technique for evaluating financial statement data
Questions With 100% Verified Answers
Relevance
The quality of information that indicates the information makes a difference in a decision.
Reliability
the quality of information that gives assurance that it is free of error and bias
Comparability
Ability to compare the accounting information of different companies because they use the same
accounting principles.
Consistency
use of the same accounting principles and methods from year to year within a company
Monetary Unit Assumption
Only items that be expressed in money are included in the accounting records
Economic Entity Assumption
every economic entity can be separately identified and accounted for
Time Period
The life of a business is divided into meaningful time periods for financial reporting
Going Concern Assumption
Entity will continue to operate long enough to recover the cost of its assets
Revenue Recognition Principle
a revenue should be recorded when a resource has been earned
Matching
Expenses are matched with related values in the same accounting period
Cost Principle
A principle that states that acquired assets and services should be recorded at their actual cost.
Full Disclosure Principle
A company reports details behind financial statements that would impact users' decisions.
Materiality Constraint
Whether an item was large enough to likely influence the decision of investor or creditor
Cost-Benefit constraint
, only information with benefits of disclosures greater than the costs of providing it need be disclosed
Conservatism Principle
the approach of choosing an accounting method that will least likely overstate assets and net income
Basic Financial Statements
income statement, balance sheet, cash flow statement
Assets
resources owned by a business
current assets
items that can or will be converted into cash within one year
Long-term investments
are generally
(1) investments in stocks and bonds of other corporations that are held for more than one year,
(2) long-term assets such as land or buildings that a company is not currently using in its operating
activities, and
(3) long-term notes receivable.
Property, Plant, and Equipment
assets with relatively long useful lives that are currently used in operating the business
Intangible assets
Are assets that do not have physical substance yet often are very valuable
Liabilities
Debts and obligations of a business
Equity
the owner's claims to the assets of the business
Common Stock
investments of assets into the business by the stockholders
Retained Earnings
income retained for use in the business
horizontal analysis (trend analysis)
a technique for evaluating a series of financial statement data over a period of time
Vertical analysis (common-size)
technique for evaluating financial statement data
