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






2. 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






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






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






5. 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.






6. 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






7. 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.






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






9. All gains and losses included in OCI






10. 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






11. Segment profit or loss - assets.






12. 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.






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






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






15. May not be capitalized.






16. 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.






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






18. 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.






19. Enacted tax rate only.






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






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






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






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






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






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






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






27. Revaluation is not permitted.






28. 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.






29. 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.






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


31. No classification






32. 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






33. 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






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






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






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






37. 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.






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






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






40. 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.






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






42. Lower of cost or market.






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






44. 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






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






46. 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.






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. No impracticality exception for error corrections.






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






50. 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