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. 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






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






3. May not be capitalized.






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






5. Cost method or legal (par) method.






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






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






8. 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.






9. 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.






10. No impracticality exception for error corrections.






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






12. No classification






13. No requirement for explicitly stating following US GAAP.






14. 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






15. All gains and losses included in OCI






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






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






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






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






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






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






22. 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.






23. 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.






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. 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






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






27. 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.






28. 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.






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






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






31. 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.






32. Lower of cost or market.






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






34. 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.






35. Slight variation from year-end reporting.






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






37. Revaluation is not permitted.






38. 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






39. Segment profit or loss - assets.






40. 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.






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






42. 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.






43. 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.






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






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






46. 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






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






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

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49. 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






50. Percentage of completion and completed contract method allowed.