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. 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






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






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






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






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






6. May not be capitalized.






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






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






9. All gains and losses included in OCI






10. Percentage of completion and completed contract method allowed.






11. Cost method or legal (par) method.






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






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






14. No impracticality exception for error corrections.






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






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






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






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






19. 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.






20. 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.






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






22. 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






23. Slight variation from year-end reporting.






24. 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.






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






26. No requirement for explicitly stating following US GAAP.






27. 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.






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






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






30. Lower of cost or market.






31. 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.






32. Enacted tax rate only.






33. 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.






34. 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






35. 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.






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






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


38. Revaluation is not permitted.






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






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






41. 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






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






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






44. 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.






45. 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.






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






47. 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






48. 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 : (






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






50. 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.






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