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