Test your basic knowledge |

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Considered non-compensatory if they meet certain requirements.






2. Entities are required to disclose concentrations of credit risk. Market risk disclosures are optional.






3. Not required to match consumption. No requirement to review method - life - or salvage value at year end. Can use composite or component depreciation.






4. Either does not have equity investors with voting rights or lacks sufficient financial resources to support its activities. Primary beneficiary must consolidate the VIE. The primary beneficiary is the entity that has the power to direct the activitie






5. Entities may elect the fair value option for recognized financial assets and financial liabilities. You cannot elect fair value on these: (1) VIE that is required to be consolidated (2) pension plan assets/liabilities (3) leased financial assets/liab






6. Single - two - or in statement of changes in owner's equity. Presentation of changes in owner's equity is phasing out completely by 12/15/2012.






7. No classification






8. Lessees--operating or capital leases. Lessors--operating - sales-type - or direct financing leases.






9. If year of change - all previous financial statements that are presented in comparative format along with the current year are to be restated to reflect the information for the new reporting entity.






10. All gains and losses included in OCI






11. No requirement for explicitly stating following US GAAP.






12. Revaluation is not permitted.






13. Bank overdrafts are excluded from cash and classified as financing cash flows.






14. Probable is defined as likely to occur and reasonably possible is defined as more likely than remote - but less than likely.






15. For lessee - at least one of four met: (1) ownership transfer (2) written BPO (3) FV of leased property at least 90% of lease payments (4) lease term at least 75% of asset's life. Lessor: sales or direct financing if one of above criteria met and : (






16. Finite life intangibles - two step process: compare carrying amount to undiscounted cash flows - then if carrying amount exceeds cash flows - impairment amount is the difference between carrying amount and fair value of asset. For indefinite life - c






17. Characterized as having commercial substance and lacking commercial substance. Commercial substance (accounted for at fair value and all gains are recognized). Lacking commercial substance (gains are only recognized when boot is received). Losses are






18. Segment profit or loss - assets.






19. Percentage of completion and completed contract method allowed.






20. Recorded as an asset and amortized using the straight-line method.






21. Revenue recognized when realized or realizable and earned. Four criteria must be met for each element of a contract before revenue can be recognized: persuasive evidence of an arrangement exists - delivery has occurred or services have been rendered






22. Enacted tax rate only.






23. May be presented as a primary financial statement or in the notes of the financial statement.


24. Two step test: fair value of reporting unit compared to its carrying value - including goodwill. If fair value is less than carrying value - an impairment loss is calculated by comparing the implied fair value of the reporting unit's goodwill to the






25. When the direct method is used - entities are required to present a reconciliation of net income to net cash flows from operating activities.






26. Entities cannot apply the FASB conceptual framework to specific accounting issues






27. Prior service cost increase the PBO and other comprehensive income in the period incurred and is then amortized to pension expense over the plan participant's remaining years of service.






28. Includes disclosure of significant estimates but not judgments made in preparing the financial statements.






29. Interest and dividends received - interest paid and taxes paid are CFO. Dividends paid are classified as CFF.






30. Valuation allowance is recognized when it is more likely than not that part or all of the deferred tax asset will not be realized.






31. Functional currency is the currency of the entity's primary economic environment. Local currency is functional currency when foreign operations are relatively self-contained within that country.






32. Components of net periodic pension cost must be aggregated and presented as one amount on the income statement.






33. Cost model: historical - accum. depr. = impairment






34. Best method that clearly reflects periodic income. Does not need to have a rational relationship with the physical inventory flow. LFIO is permitted.






35. Should be classified as current or non-current based on the classification of the related asset or liability. If no asset/liability - timing of the reversal is used. All assets/liabilities must be netted (one net current and one net non-current).






36. If year-end differs by three months or less - parent can use the subsidiary's regular financial statements of a different period - but they must be significantly disclosed.






37. Asset not required to be remeasures - but does get tested for impairment once classified as held-for-sale






38. Impairment losses recognized in income statement and cost basis is reduced. If held-to-maturity - subsequent changes are not recognized. If available-for-sale - subsequent income is included in OCI.






39. Entities have two choices when accounting for gains and losses: (1) recognize on the income statement in period incurred (2) recognize in OCI in the period incurred and then amortize to pension expense using the corridor approach.






40. Comparative financial statements not required. SEC requires comparative financial statements (2 B/S - 3 other). Cumulative effect is an adjustment to beginning retained earnings to the earliest prior period presented.






41. Recognized in a two-step process: (1) recognition of the tax benefit (2) measurement of the tax benefit.






42. Slight variation from year-end reporting.






43. Unusual in nature and infrequence in occurrence and material.






44. Existing condition - situation - or set of circumstances involving varying degrees of uncertainty that may result in the decrease in an asset or the incurrence of a liability. A provision for a loss contingency should be accrued with a charge to inco






45. No separate recognition is given to the conversion feature when convertible bonds are issued. Bonds are recorded in same manner as non-convertible bonds.






46. Indirect direct costs paid by the lessee are expensed when incurred.






47. Classified as: (1) trading (2) available-for-sale (3) held-to-maturity






48. Funded status is reported of an overfunded pension plan is reported in full as a noncurrent asset. Underfunded plans are reported as current - non-current - or both.






49. Research and development costs expensed - reported using the cost model only.






50. Components of net periodic pension cost are SIRAGE: service cost - interest cost - return on plan assets - amortization of prior service cost - gain/loss amortization - existing net obligation/asset amortization.