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. 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.






2. May not be capitalized.






3. Percentage of completion and completed contract method allowed.






4. 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






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






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






7. Segment profit or loss - assets.






8. 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.






9. 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.






10. 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






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

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12. 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.






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






14. Enacted tax rate only.






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






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






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






18. 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.






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






20. 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).






21. 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






22. 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.






23. Revaluation is not permitted.






24. 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






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






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






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






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






29. 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.






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






31. Cost method or legal (par) method.






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






33. No classification






34. No impracticality exception for error corrections.






35. All gains and losses included in OCI






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






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






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






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






40. 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






41. 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






42. 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 : (






43. 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.






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






45. 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.






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. 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.






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






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






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