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. 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






2. 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






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






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






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






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






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






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






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






10. Cost method or legal (par) method.






11. 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.






12. 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.






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






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


15. Lower of cost or market.






16. Segment profit or loss - assets.






17. 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.






18. 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.






19. 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).






20. All gains and losses included in OCI






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






22. 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.






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






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






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






26. 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.






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






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






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






30. 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.






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






32. 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.






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






34. 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.






35. 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






36. No classification






37. No impracticality exception for error corrections.






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






39. May not be capitalized.






40. Slight variation from year-end reporting.






41. 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 : (






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






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






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






45. 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.






46. Revaluation is not permitted.






47. 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






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






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. 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.