Peregrine Exam
What is a general ledger? - answersA general ledger account is an account or record
used to sort, store and summarize a company's transactions.
asset accounts such as Cash, Accounts Receivable, Inventory, Investments, Land, and
Equipment
liability accounts including Notes Payable, Accounts Payable, Accrued Expenses
Payable, and Customer Deposits
stockholders' equity accounts such as Common Stock, Retained Earnings, Treasury
Stock, and Accumulated Other Comprehensive Income
What is the difference between accounts payable and accounts receivable? -
answersAccounts payable is a current liability account in which a company records the
amounts it owes to suppliers or vendors for goods or services that it received on credit.
Accounts receivable is a current asset account in which a company records the
amounts it has a right to collect from customers who received goods or services on
credit.
What is the cost of goods sold? - answersThe cost of goods sold is the cost of the
products that a retailer, distributor, or manufacturer has sold.
What is owner's equity? - answersOwner's equity is one of the three main sections of a
sole proprietorship's balance sheet and one of the components of the accounting
equation: Assets = Liabilities + Owner's Equity.
What is principles of accounting? - answersPrinciples of accounting can also refer to the
basic or fundamental accounting principles: cost principles, matching principles, full
, disclosure principles, materiality principles, going concern principles, economic entity
principles, and so on. In this context, principles of accounting refers to the broad
underlying concepts which guide accountants when preparing financial statements.
What is equity? - answersEquity can indicate an ownership interest in a business, such
as stockholders' equity or owner's equity.
Equity can mean an owner's interest in a personal asset. For example, the owner of a
$200,000 house that has a mortgage loan of $75,000 is said to have $125,000 of equity
in the house.
What is meant by reconciling an account? - answersReconciling an account is likely to
mean proving or documenting that an account balance is correct.
What is included in cash and cash equivalents? - answersIn accounting, a company's
cash includes the following:
currency and coins
checks received from customers but not yet deposited
checking accounts
petty cash
Cash equivalents are short-term, highly liquid investments with a maturity date that was
3 months or less at the time of purchase.
money market accounts
U.S. Treasury Bills
commercial paper
What is the difference between an implicit cost and an explicit cost? - answersAn
implicit cost is present but it is not initially shown or reported as a separate cost.
An explicit cost is a cost that is present and it is clearly shown or reported as a separate
cost.
What is the difference between stocks and bonds? - answersStocks, or shares of capital
stock, represent an ownership interest in a corporation. Every corporation has common
stock.
Bonds are a form of long-term debt in which the issuing corporation promises to pay the
principal amount at a specified maturity date.
AN INCREASE TO WHICH OF THE FOLLOWING ACCOUNTS WILL INCREASE
OWNERS' EQUITY? - answersClient Fees
IN TIMES OF RISING PRICES, THE INVENTORY COST METHOD THAT WILL YIELD
THE LOWEST NET INCOME IS: - answersLIFO (LIFO is the acronym for last-in, first-
out, which is a cost flow assumption often used by U.S. corporations in moving costs
from inventory to the cost of goods sold.
What is a general ledger? - answersA general ledger account is an account or record
used to sort, store and summarize a company's transactions.
asset accounts such as Cash, Accounts Receivable, Inventory, Investments, Land, and
Equipment
liability accounts including Notes Payable, Accounts Payable, Accrued Expenses
Payable, and Customer Deposits
stockholders' equity accounts such as Common Stock, Retained Earnings, Treasury
Stock, and Accumulated Other Comprehensive Income
What is the difference between accounts payable and accounts receivable? -
answersAccounts payable is a current liability account in which a company records the
amounts it owes to suppliers or vendors for goods or services that it received on credit.
Accounts receivable is a current asset account in which a company records the
amounts it has a right to collect from customers who received goods or services on
credit.
What is the cost of goods sold? - answersThe cost of goods sold is the cost of the
products that a retailer, distributor, or manufacturer has sold.
What is owner's equity? - answersOwner's equity is one of the three main sections of a
sole proprietorship's balance sheet and one of the components of the accounting
equation: Assets = Liabilities + Owner's Equity.
What is principles of accounting? - answersPrinciples of accounting can also refer to the
basic or fundamental accounting principles: cost principles, matching principles, full
, disclosure principles, materiality principles, going concern principles, economic entity
principles, and so on. In this context, principles of accounting refers to the broad
underlying concepts which guide accountants when preparing financial statements.
What is equity? - answersEquity can indicate an ownership interest in a business, such
as stockholders' equity or owner's equity.
Equity can mean an owner's interest in a personal asset. For example, the owner of a
$200,000 house that has a mortgage loan of $75,000 is said to have $125,000 of equity
in the house.
What is meant by reconciling an account? - answersReconciling an account is likely to
mean proving or documenting that an account balance is correct.
What is included in cash and cash equivalents? - answersIn accounting, a company's
cash includes the following:
currency and coins
checks received from customers but not yet deposited
checking accounts
petty cash
Cash equivalents are short-term, highly liquid investments with a maturity date that was
3 months or less at the time of purchase.
money market accounts
U.S. Treasury Bills
commercial paper
What is the difference between an implicit cost and an explicit cost? - answersAn
implicit cost is present but it is not initially shown or reported as a separate cost.
An explicit cost is a cost that is present and it is clearly shown or reported as a separate
cost.
What is the difference between stocks and bonds? - answersStocks, or shares of capital
stock, represent an ownership interest in a corporation. Every corporation has common
stock.
Bonds are a form of long-term debt in which the issuing corporation promises to pay the
principal amount at a specified maturity date.
AN INCREASE TO WHICH OF THE FOLLOWING ACCOUNTS WILL INCREASE
OWNERS' EQUITY? - answersClient Fees
IN TIMES OF RISING PRICES, THE INVENTORY COST METHOD THAT WILL YIELD
THE LOWEST NET INCOME IS: - answersLIFO (LIFO is the acronym for last-in, first-
out, which is a cost flow assumption often used by U.S. corporations in moving costs
from inventory to the cost of goods sold.
