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






2. Segment profit or loss - assets.






3. Slight variation from year-end reporting.






4. 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.






5. May not be capitalized.






6. No requirement for explicitly stating following US GAAP.






7. 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.






8. If year of change - all previous financial statements that are presented in comparative format along with the current year are to be restated to reflect the information for the new reporting entity.






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






10. Enacted tax rate only.






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






12. 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.






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






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






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






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






18. 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.






19. All gains and losses included in OCI






20. 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.






21. 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






22. 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






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






24. 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.






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






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






27. No impracticality exception for error corrections.






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






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






30. 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.






31. 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).






32. 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 : (






33. Cost method or legal (par) method.






34. Percentage of completion and completed contract method allowed.






35. Enacted tax rate only.






36. 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






37. 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






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


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






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






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






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






43. 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






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






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






46. 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






47. Revaluation is not permitted.






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






49. 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.






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