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. Unusual in nature and infrequence in occurrence and material.






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






3. 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.






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






5. Segment profit or loss - assets.






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






7. Enacted tax rate only.






8. Cost method or legal (par) method.






9. 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






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






11. 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.






12. 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.






13. 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.






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






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






16. 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






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






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






19. 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.






20. May not be capitalized.






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






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






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






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






25. 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.






26. Slight variation from year-end reporting.






27. 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.






28. 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.






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






30. 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






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






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






33. 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).






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






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






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






37. No classification






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






39. Percentage of completion and completed contract method allowed.






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






41. 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






42. All gains and losses included in OCI






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. Must disclose nature of operations - use of estimates - estimate of a change in estimate - vulnerability of the risk f near-term severe impact from a material concentration.






45. 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






46. Lower of cost or market.






47. 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






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






49. 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 : (






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