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. 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.






2. 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






3. 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).






4. 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.






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






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






7. Slight variation from year-end reporting.






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






9. Enacted tax rate only.






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






11. 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.






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






13. 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






14. 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.






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






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






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






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






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






20. The subsequent event evaluation period extends through the date that the financial statements are issued (public companies) or the date that the financial statements are available to be issued (all other entities). Subsequent events are classified as






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






22. 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.






23. 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.






24. 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.






25. 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.






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






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






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






29. All gains and losses included in OCI






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






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






32. May not be capitalized.






33. Percentage of completion and completed contract method allowed.






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






36. 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 : (






37. 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.






38. 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






39. Cost method or legal (par) method.






40. No classification






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






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






43. 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






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






45. Revaluation is not permitted.






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

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47. 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.






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






49. 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.






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.







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