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 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.






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






3. 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






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






5. 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.






6. All gains and losses included in OCI






7. 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.






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






9. 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.






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






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






12. 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.






13. Percentage of completion and completed contract method allowed.






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

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15. 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.






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






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






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






19. Segment profit or loss - assets.






20. 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.






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






22. 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.






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






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






25. 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.






26. 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.






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






28. Revaluation is not permitted.






29. Enacted tax rate only.






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






31. 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






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






33. 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.






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






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






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






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






38. 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.






39. No classification






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






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






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






43. 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 : (






44. May not be capitalized.






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






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. Slight variation from year-end reporting.






48. 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






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






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