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






2. 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






3. 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.






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






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






6. Lower of cost or market.






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






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






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






10. 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).






11. 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






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


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






14. 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.






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






16. 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.






17. 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






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






19. 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 : (






20. All gains and losses included in OCI






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






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






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






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






25. No classification






26. Enacted tax rate only.






27. 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






28. 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.






29. Revaluation is not permitted.






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






31. Enacted tax rate only.






32. 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






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






34. No impracticality exception for error corrections.






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






36. 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.






37. Segment profit or loss - assets.






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






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






40. 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.






41. 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.






42. 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.






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






44. Slight variation from year-end reporting.






45. Cost method or legal (par) method.






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






47. 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.






48. Percentage of completion and completed contract method allowed.






49. No requirement for explicitly stating following US GAAP.






50. 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.