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 cannot apply the FASB conceptual framework to specific accounting issues






2. No impracticality exception for error corrections.






3. Enacted tax rate only.






4. 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.






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






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






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






8. Lower of cost or market.






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






10. All gains and losses included in OCI






11. 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






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






13. 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).






14. 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.






15. No classification






16. Enacted tax rate only.






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






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. May not be capitalized.






20. 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.






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. No requirement for disclosure of key management compensation arrangements.






23. 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






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






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






26. Cost method or legal (par) method.






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






28. 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.






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






30. 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.






31. 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






32. 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






33. No requirement for explicitly stating following US GAAP.






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






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






36. 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.






37. 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.






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






39. 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.






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






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






42. 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






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






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






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






46. 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.






47. 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.






48. 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.






49. 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






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