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Business Peregrine Exam Questions with Correct Answers
1. What is a general ledger?: A 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
2. What is the difference between accounts payable and accounts receivable?-
: Accounts 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.
3. What is the cost of goods sold?: The cost of goods sold is the cost of the products that a retailer, distributor,
or manufacturer has sold.
4. What is owner's equity?: Owner'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.
5. What is principles of accounting?: Principles 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 en- tity principles, and so on. In this context, principles of accounting refers to the broad underlying concepts which guide accountants when preparing financial statements.
6. What is equity?: Equity 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.
7. What is meant by reconciling an account?: Reconciling an account is likely to mean proving or documenting that
an account balance is correct.
8. What is included in cash and cash equivalents?: In 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
9. What is the difference between an implicit cost and an explicit cost?: An 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.
10. What is the difference between stocks and bonds?: Stocks, 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.
11. AN INCREASE TO WHICH OF THE FOLLOWING ACCOUNTS WILL IN- CREASE OWNERS'
EQUITY?: Client Fees
21. All of the following are considered extrinsic motivators in Herzberg's two-factor theory EXCEPT::
Work itself
22. Which of the following is NOT one of the process motivation theories?: -
Acquired needs theory
23. An individual who purchases a computer later decides to acquire a new motherboard. In terms of
computing GDP, this new motherboard would be a(n): Final good
24. The largest component of GDP is: consumption
25. In economics, firms are assumed to: Maximize profits
26. Holding everything else equal, total revenue increases: when either price or quantity increase
27. Government tactics that include removing incentives, demanding a higher share of profits and taxes, and
confiscating foreign assets are known as:: Ex- propriation
28. "People of the same trade seldom meet together, even for merriment and diversion, but their conversation
often ends in conspiracy against the public." This quote from Adam Smith is referring to which of the following business relationship terms:: Collusion
29. is a collection of facts organized so that they have additional value beyond the value of the facts
themselves.: Information
30. is the simulation of a real or imagined environment that can be experienced visually in three
dimensions.: Virtual reality
31. The Federal Highway Administration uses notice-and-comment rulemak- ing. This process begins with: the
publication of a notice of proposed rulemaking.
32. Kip opens an account at a Lotsa Goodies Store, and buys a digital music player and other items, but makes
no payments on the account. To collect the debt, Mako, the manager, contacts Kip's parents. This violates: No federal law
33. The process of setting major organization objectives and developing plans to achieve them is called:: Strategic
planning
34. One way human resource planning links to strategic planning is by provid- ing a set of inputs into the::
strategy formulation process
35. In the SERVQUAL instrument for measuring service quality, the concept of assurance is associated with:
The ability to convey trust and confidence
36. Which of the following is not one of W. Edwards Deming's 14 points?: The only performance standard is Zero
Defects
37. A leading force currently driving change at work is:: Global competition
38. A questioning, probing attitude is at the core of:: critical thinking
39. Which of the following IS NOT a purpose of a marketing plan?: It explains how marketing activities mesh
with other functional areas
40. In the context of marketing planning, why is it vital that the marketing plan be capable of selling itself to top
management?: Because top managers must decide whether the marketing plan is the best use for the organization's scarce resources
41. Sensitivity analysis considers: changes in the values of the payoffs.
42. A population characteristic, such as a population mean, is called: A para- meter
43. OPERATING STATEMENT IS ANOTHER NAME FOR WHICH OF THE FOL- LOWING?: Income
Statement
44. PURCHASES RETURNS AND ALLOWANCES AND PURCHASE DIS- COUNTS ARE CLASSIFIED AS
WHICH OF THE FOLLOWING ON THE INCOME STATEMENT?: CONTRA-COST ACCOUNTS
45. THE LAST STEP IN PREPARING A WORKSHEET IS WHICH OF THE FOL- LOWING?: TOTAL THE
INCOME STATEMENT AND BALANCE SHEET ITEMS TO COMPUTE NET INCOME (LOSS)
VARIOUS COUNTRIES.
51. Inflation: IS DEFINED AS A SUSTAINED INCREASE IN THE GENERAL LEV- EL OF PRICES FOR GOODS
AND SERVICES IN A COUNTY, AND IS MEASURED AS AN ANNUAL PERCENTAGE CHANGE. UNDER
CONDITIONS OF INFLATION, THE PRICES OF THINGS RISE OVER TIME.
52. Recession: IS A SIGNIFICANT DECLINE IN ECONOMIC ACTIVITY THAT GOES ON FOR MORE
THAN A FEW MONTHS. IT IS VISIBLE IN INDUSTRI- AL PRODUCTION, EMPLOYMENT, REAL INCOME
AND WHOLESALE-RETAIL TRADE.
53. International Trade: IS THE EXCHANGE OF CAPITAL, GOODS, AND SER- VICES ACROSS
INTERNATIONAL BORDERS OR TERRITORIES. IN MOST COUNTRIES, SUCH TRADE REPRESENTS A
SIGNIFICANT SHARE OF GROSS DOMESTIC PRODUCT (GDP).
54. MICROECONOMIC TRENDS: ARE PATTERNS OF MOVEMENTS OR CHANGES IN ECONOMIC
FACTORS SUCH AS CONSUMER, HOUSEHOLD, OR FIRMS' INCOME, SAVINGS, DEBT, AND
EXPENDITURE.
55. MICROECONOMIC ANALYSIS: ATTEMPTS TO EXPLAIN THE BEHAVIOR OF INDIVIDUALS AND
ORGANIZATIONS IN A GIVEN ECONOMY.
FUNCTIONS THROUGH MODELING AND BY EMPHASIZING INTERESTS.
56. Accounting Profit: IS THE MONETARY COSTS A FIRM PAYS OUT AND THE REVENUE A FIRM
RECEIVES.
TOTAL MONETARY - REVENUE TOTAL COSTS.
57. Economic Profit: IS THE MONETARY COSTS AND OPPORTUNITY COSTS A FIRM PAYS AND THE
REVENUE A FIRM RECEIVES.
TOTAL REVENUE-(EXPLICIT COSTS + IMPLICIT COSTS).
58. LAW OF SUPPLY: THAT THE QUANTITY OF A GOOD SUPPLIED (I.E., THE AMOUNT OWNERS OR
PRODUCERS OFFER FOR SALE) RISES AS THE MAR- KET PRICE RISES, AND FALLS AS THE PRICE
FALLS.
59. Law of Demand: SAYS THAT THE QUANTITY OF A GOOD DEMANDED FALLS AS THE PRICE
RISES, AND VICE VERSA.
60. Government tactics that include removing incentives: advance their own interests, those of the organization,
or those of some other group.
61. A suit for negligence must prove four elements: duty of care, breach of duty, proximate cause and:
Actual harm
62. Financial Regulation: is a form of regulation or supervision, which subjects financial institutions to certain
requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system. This may be handled by either a government or non-government organization.
63. THE FTC'S BUREAU OF CONSUMER PROTECTION: STOPS UNFAIR, DE- CEPTIVE AND
FRAUDULENT BUSINESS PRACTICES BY COLLECTING COM- PLAINTS AND CONDUCTING
INVESTIGATIONS, SUING COMPANIES AND PEOPLE THAT BREAK THE LAW, DEVELOPING RULES TO
MAINTAIN A FAIR MARKETPLACE, AND EDUCATING CONSUMERS AND BUSINESSES ABOUT THEIR
RIGHTS AND RESPONSIBILITIES.
64. 6 BASIC RIGHTS OF CONSUMERS: right to safety, right to be informed, right to choose, right to be heard,
right to consumer education, right to courteous service
65. Corporate culture is shown: (1) the ways the organization conducts its busi- ness, treats its employees, customers,
and the wider community, (2) the extent to which freedom is allowed in decision making, developing new ideas, and personal expression, (3) how power and information flow through its hierarchy, and (4) how committed employees are towards collective objectives. It affects the organization's productivity and performance, and provides guidelines on customer care and ser- vice, product quality and safety, attendance and punctuality, and concern for the environment.
67. Individual and Group Dynamics: Interaction of complex intra- and inter-per- sonal forces operating in a group
which determine its character, development, and long-term survival. Field of study concerned with determination of laws underlying group behavior.
68. Population Sampling: is the process of taking a subset of subjects that is representative of the entire
population. The sample must have sufficient size to warrant statistical analysis.
69. TYPE I ERROR: IS THE REJECTION OF A TRUE NULL HYPOTHESIS (ALSO KNOWN AS A "FALSE
POSITIVE" FINDING)
70. TYPE II ERROR: IS FAILING TO REJECT A FALSE NULL HYPOTHESIS (ALSO KNOWN AS A
"FALSE NEGATIVE" FINDING)
