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. 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.






2. May not be capitalized.






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






4. 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.






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


6. 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.






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






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






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






11. 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.






12. Lower of cost or market.






13. 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.






14. 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).






15. 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






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






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






18. No classification






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






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






21. All gains and losses included in OCI






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






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






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






25. 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.






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






27. 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.






28. 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.






29. Enacted tax rate only.






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






31. No impracticality exception for error corrections.






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






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






34. Cost method or legal (par) method.






35. 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






36. 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 : (






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






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






39. 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.






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






41. 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.






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






43. No requirement for explicitly stating following US GAAP.






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






45. Slight variation from year-end reporting.






46. 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






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






48. 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.






49. Percentage of completion and completed contract method allowed.






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