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. 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.






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






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






4. No requirement for explicitly stating following US GAAP.






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






6. Percentage of completion and completed contract method allowed.






7. 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






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






9. 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.






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






11. Enacted tax rate only.






12. Enacted tax rate only.






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






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






16. 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.






17. Segment profit or loss - assets.






18. 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.






19. 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.






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






21. No impracticality exception for error corrections.






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






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






24. 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.






25. 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 : (






26. Slight variation from year-end reporting.






27. Cost method or legal (par) method.






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






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






30. All gains and losses included in OCI






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






32. 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.






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






35. May not be capitalized.






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






37. 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.






38. 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






39. No classification






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






41. 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.






42. Revaluation is not permitted.






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






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






45. 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.






46. 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.






47. 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






48. 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






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






50. 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.