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






3. 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






4. 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.






5. Enacted tax rate only.






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






7. 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.






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






9. 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).






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






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






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






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






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






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






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






17. 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.






18. No classification






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






20. 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.






21. May not be capitalized.






22. Segment profit or loss - assets.






23. 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






24. 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.






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






26. 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.






27. 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






28. 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 : (






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






30. Revaluation is not permitted.






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






32. Lower of cost or market.






33. 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.






34. 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.






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

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36. 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.






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






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






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






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






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






42. All gains and losses included in OCI






43. 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






44. No impracticality exception for error corrections.






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. Percentage of completion and completed contract method allowed.






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






48. 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.






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






50. 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