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. 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).






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






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






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






5. 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






6. 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.






7. 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.






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






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






10. Lower of cost or market.






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






12. May not be capitalized.






13. 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






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






15. No requirement for explicitly stating following US GAAP.






16. 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






17. 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






18. 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.






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






20. 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






21. 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.






22. 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.






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






24. Revaluation is not permitted.






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






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






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






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






29. Slight variation from year-end reporting.






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






31. 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.






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






33. 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.






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






35. Enacted tax rate only.






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


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






38. 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.






39. 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






40. 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 : (






41. 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.






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






43. No classification






44. No impracticality exception for error corrections.






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






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






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






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






49. All gains and losses included in OCI






50. Segment profit or loss - assets.