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. 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






2. 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.






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






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






5. May not be capitalized.






6. 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 : (






7. (Balance sheet - income statement - SOCF) as of the most recent fiscal quarter and as of the end of the preceding fiscal year.






8. 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.






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






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






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






12. Segment profit or loss - assets.






13. Two Step Test: (1) test for recovery: compare carrying value to undiscounted future cash flows (2) calculate impairment: difference between carrying value and fair value. Reversal of impairment losses is only permitted for assets held for sale.






14. Remeasurement method must be used when a foreign subsidiary is operating in a highly inflationary environment.






15. Contracts that may be settled in cash or stock are not included in diluted EPS if circumstances indicate that eh contract will be paid in cash.






16. 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.






17. All adjustments for changes in deferred tax balances due to changes in tax laws or rates are recognized on the income statement.






18. Enacted tax rate only.






19. All gains and losses included in OCI






20. 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






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






22. No impracticality exception for error corrections.






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






24. Costs before technological feasibility must be expensed - costs after technological feasibility are capitalized.






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






26. Revaluation is not permitted.






27. No requirement for explicitly stating following US GAAP.






28. Percentage of completion and completed contract method allowed.






29. Considered non-compensatory if they meet certain requirements.






30. 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.






31. 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






32. Recognition of gains is dependent on the rights of the leased property retained by the seller-lessee.






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


34. Projection benefit obligation (PBO) is the defined benefit pension plan liability.






35. Lower of cost or market.






36. No classification






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






38. Enacted tax rate only.






39. No requirement for disclosure of key management compensation arrangements.






40. 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






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






42. 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.






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






44. Effective interest method is required - unless the straight-line method is not materially different from the effective interest method. Amortization is done over the contractual life of the bond.






45. 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.






46. 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.






47. Unrecognized prior service cost and unrecognized pension gains and losses are reported in AOCI. The pension benefit asset/liability is equal to the funded status of the pension plan.






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






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






50. FASB has not yet issued a pronouncement on convergence with IASB.