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: (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.






2. 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.






3. 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.






4. 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.






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






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






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






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






9. Segment profit or loss - assets.






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






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






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. 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.






14. 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






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






16. 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






17. Revaluation is not permitted.






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






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






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






21. May not be capitalized.






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






23. Enacted tax rate only.






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






25. Slight variation from year-end reporting.






26. 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.






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






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






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






30. 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 : (






31. No impracticality exception for error corrections.






32. 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.






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






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






35. 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






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






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






38. 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.






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






40. Lower of cost or market.






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






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






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






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






45. No requirement for explicitly stating following US GAAP.






46. 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






47. 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).






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






49. Cost method or legal (par) method.






50. 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.