Peregrine Exam Prep (Latest 2023/ 2024 Update) Questions and Verified Answers| 100% Correct

Peregrine Exam Prep (Latest 2023/ 2024

Update) Questions and Verified Answers|

100% Correct

Q: What is the difference between an implicit cost and an explicit cost?

Answer:

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.

Q: What is the difference between stocks and bonds?

Answer:

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.

Q: AN INCREASE TO WHICH OF THE FOLLOWING ACCOUNTS WILL INCREASE

OWNERS' EQUITY?

Answer:

Client Fees

Q: IN TIMES OF RISING PRICES, THE INVENTORY COST METHOD THAT WILL

YIELD THE LOWEST NET INCOME IS:

Answer:

LIFO (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.

Example: Assume that a corporation uses LIFO and has three units of a product in its inventory.

Due to its supplier raising its prices, the corporation purchased the items at different costs and in

the following sequence: $40, $44, and $46. The corporation ships the oldest item (the one

purchased for $40) to a customer at a selling price of $60. However, under the LIFO cost flow

assumption the company reports its cost of goods sold at $46 (the latest cost) and reports a gross

profit of $14. (The costs of $40 and $44 remain in inventory.)

Q: When a business erroneously records expenses as assets, it has violated the measurement

issue of

Answer:

classification

Q: A dividend will reduce which of the following accounts?

Answer:

Retained Earnings

Q: Lying by omission involves intentionally

Answer:

withholding material facts.

Q: Conflicts of interest exist when employees must choose whether to

Answer:

advance their own interests, those of the organization, or those of some other group.

Q: Which of the following statements is CORRECT?

Answer:

Free cash flow (FCF) is, essentially, the cash flow that is available for interest and dividends

after the company has made the investments in current and fixed assets that are necessary to

sustain ongoing operations.

Q: A corporate bond currently yields 8.3%. Municipal bonds with the same risk, maturity, and

liquidity currently yield 5.5%. At what tax rate would investors be indifferent between the two

bonds?

Answer:

33.73%

Q: When the costs of supplies increase in an industry, the low-cost leader

Answer:

be the only firm able to pay the higher prices and continue to earn average or above- average

returns.

Q: TQM is most helpful to firms following the ____ business strategy.

Answer:

integrated cost-leadership differentiation

Q: All of the following are considered extrinsic motivators in Herzberg's two-factor theory

EXCEPT:

Answer:

Work itself

Q: Which of the following is NOT one of the process motivation theories?

Answer:

Acquired needs theory

Q: 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)

Answer:

Final good

Q: The largest component of GDP is

Answer:

consumption

Q: In economics, firms are assumed to

Answer:

Maximize profits

Q: Holding everything else equal, total revenue increases

Answer:

when either price or quantity increase

Q: Government tactics that include removing incentives, demanding a higher share of profits

and taxes, and confiscating foreign assets are known as:

Answer:

Expropriation