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. Slight variation from year-end reporting.






2. 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






3. 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.






4. 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.






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






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






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






8. No impracticality exception for error corrections.






9. Percentage of completion and completed contract method allowed.






10. Enacted tax rate only.






11. 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.






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






13. 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






14. May not be capitalized.






15. Revaluation is not permitted.






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






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






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






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






20. 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.






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






22. 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 : (






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






24. 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.






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






26. 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.






27. Segment profit or loss - assets.






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






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






31. 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






32. 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.






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






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






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






36. 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).






37. 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






38. 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.






39. 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.






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






41. 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.






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


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






45. Cost method or legal (par) method.






46. 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.






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. 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.






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






50. No classification