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Test your basic knowledge |
U.S. GAAP
Start Test
Study First
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. 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.
Accounting for Stock Issued to Employees
Inventory Valuation
Comprehensive Income (Presentation)
Contingent Liability
2. Asset not required to be remeasures - but does get tested for impairment once classified as held-for-sale
Disclosure of Financial Instruments
Consolidation - Parent and Subsidiary with Different Year-Ends
Discontinued Operations
Revenue Recognition
3. 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.
Bond Discount/Premium Amortization
Marketable Securities - Impairment
Extraordinary Items
Inventory Valuation
4. Research and development costs expensed - reported using the cost model only.
Financial Instruments (Initial Recognition)
Consolidation - Parent and Subsidiary with Different Year-Ends
Diluted EPS
Intangible Assets
5. 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
Impairment of Intangible Assets Other Than Goodwill
Accounting Changes
Accounting for Income Taxes (Valuation)
Development Costs (R&D)
6. Cost method or legal (par) method.
Investment Property
Treasury Stock
Funded Status of Pension Plan
Foreign Currency Translation
7. 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
Convertible Bonds
Extraordinary Items
Nonmonetary Exchanges
Reporting of Pension Cost
8. Remeasurement method must be used when a foreign subsidiary is operating in a highly inflationary environment.
Revenue Recognition
Marketable Securities - Available-For-Sale
Foreign Currency Translation
Use of Tax Rates
9. Recorded as an asset and amortized using the straight-line method.
Investment Property
Treasury Stock
Computer and Software Development Costs
Bond Issue Costs
10. (Balance sheet - income statement - SOCF) as of the most recent fiscal quarter and as of the end of the preceding fiscal year.
Lease Classification
Impairment of Intangible Assets Other Than Goodwill
Interim Financial Reporting Requirements
Accounting Changes
11. Enacted tax rate only.
Marketable Securities - Impairment
Interim Financial Reporting Tax Rates
Statement of Cash Flows (Cash)
Consolidation - Parent and Subsidiary with Different Year-Ends
12. Classified as: (1) trading (2) available-for-sale (3) held-to-maturity
Interim Financial Reporting Tax Rates
Marketable Securities - Classification
Intangible Assets
Consolidation - Parent and Subsidiary with Different Year-Ends
13. 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
Construction Contracts
Interim Financial Reporting
Interim Financial Reporting Tax Rates
Subsequent Events
14. Slight variation from year-end reporting.
Financial Instruments (Initial Recognition)
Uncertain Tax Positions
Interim Financial Reporting
Treasury Stock
15. May be presented as a primary financial statement or in the notes of the financial statement.
16. Not required to match consumption. No requirement to review method - life - or salvage value at year end. Can use composite or component depreciation.
Construction Contracts
Change in Accounting Entity
Fixed Asset Depreciation
Bond Issue Costs
17. No requirement for disclosure of key management compensation arrangements.
Reporting of Deferred Taxes
Related Party Transactions
Contingent Liability
Goodwill Impairment
18. Indirect direct costs paid by the lessee are expensed when incurred.
Variable Interest Entity
Consolidation - Parent and Subsidiary with Different Year-Ends
Change in Accounting Entity
Indirect Costs of Lease
19. FASB has not yet issued a pronouncement on convergence with IASB.
Comprehensive Income (Revaluation)
Financial Instruments (Initial Recognition)
Notes to the Financial Statements
Computer and Software Development Costs
20. Entities cannot apply the FASB conceptual framework to specific accounting issues
Accounting Changes
Interim Financial Reporting Requirements
Conceptual Framework
Discontinued Operations
21. Enacted tax rate only.
Investment Property
Fixed Asset Depreciation
Use of Tax Rates
Impairment of Intangible Assets Other Than Goodwill
22. Entities are required to disclose concentrations of credit risk. Market risk disclosures are optional.
Disclosure of Financial Instruments
Sale-Leaseback Transactions
Inventory Valuation
Foreign Currency Translation
23. Segment profit or loss - assets.
Segment Reporting
Discontinued Operations
Statement of Cash Flows (Cash)
Accounting Changes
24. All gains and losses included in OCI
Reporting of Pension Cost
Inventory Cost Flow Assumptions
Marketable Securities - Available-For-Sale
Reporting of Deferred Taxes
25. No impracticality exception for error corrections.
Goodwill Impairment
Error Correction
Change in Accounting Entity
Segment Reporting
26. 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.
Funded Status of Pension Plan
Convertible Bonds
Statement of Cash Flows (Interest and Dividends)
Foreign Currency Translation
27. Components of net periodic pension cost must be aggregated and presented as one amount on the income statement.
Extraordinary Items
Construction Contracts
Reporting of Pension Cost
Sale-Leaseback Transactions
28. 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
Marketable Securities - Impairment
Segment Reporting
Accounting for Income Taxes (Valuation)
Financial Instruments (Fair Value)
29. 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.
Computer and Software Development Costs
Capital (Finance) Lease Criteria
Statement of Cash Flows (Cash)
Bond Discount/Premium Amortization
30. Best method that clearly reflects periodic income. Does not need to have a rational relationship with the physical inventory flow. LFIO is permitted.
Bond Discount/Premium Amortization
Extraordinary Items
Accounting for Income Taxes (Valuation)
Inventory Cost Flow Assumptions
31. No separate recognition is given to the conversion feature when convertible bonds are issued. Bonds are recorded in same manner as non-convertible bonds.
Reporting of Remeasurements
Reporting of Pension Cost
Comprehensive Income (Presentation)
Convertible Bonds
32. Revaluation is not permitted.
Marketable Securities - Available-For-Sale
Interim Financial Reporting Tax Rates
Statement of Changes in Shareholders' Equity
Comprehensive Income (Revaluation)
33. Interest and dividends received - interest paid and taxes paid are CFO. Dividends paid are classified as CFF.
Variable Interest Entity
Fixed Asset Depreciation
Statement of Cash Flows (Interest and Dividends)
Conceptual Framework
34. May not be capitalized.
Bond Issue Costs
Development Costs (R&D)
Disclosure of Financial Instruments
Fixed Asset Impairment
35. When the direct method is used - entities are required to present a reconciliation of net income to net cash flows from operating activities.
Pension Plan Liability
Statement of Cash Flows (Method)
Bond Issue Costs
Change in Accounting Entity
36. 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.
Consolidation - Parent and Subsidiary with Different Year-Ends
Fixed Asset Valuation
Disclosure of Financial Instruments
Contingencies (Probable and Possible Definitions)
37. 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.
Sale-Leaseback Transactions
Determining Functional Currency
Accounting Changes
Reporting of Remeasurements
38. 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
Contingent Liability
Lease Classification
Disclosure of Financial Instruments
Prior Service Cost
39. 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.
Determining Functional Currency
Extraordinary Items
Change in Accounting Entity
Revenue Recognition
40. Unusual in nature and infrequence in occurrence and material.
Conceptual Framework
Foreign Currency Translation
Inventory Cost Flow Assumptions
Extraordinary Items
41. 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.
Variable Interest Entity
Pension Plan Cost
Fixed Asset Valuation
Prior Service Cost
42. All adjustments for changes in deferred tax balances due to changes in tax laws or rates are recognized on the income statement.
Statement of Cash Flows (Method)
Accounting for Income Taxes (Valuation)
Accounting for Adjustments in Tax Rates
Treasury Stock
43. 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.
Segment Reporting
Variable Interest Entity
Risks and Uncertainties
Determining Functional Currency
44. 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.
Prior Service Cost
Inventory Cost Flow Assumptions
Indirect Costs of Lease
Gains and Losses on Pensions
45. Bank overdrafts are excluded from cash and classified as financing cash flows.
Computer and Software Development Costs
Accounting for Adjustments in Tax Rates
Statement of Cash Flows (Cash)
Impairment of Intangible Assets Other Than Goodwill
46. Lower of cost or market.
Financial Instruments (Initial Recognition)
Statement of Cash Flows (Method)
Inventory Valuation
Risks and Uncertainties
47. No classification
Investment Property
Pension Plan Liability
Statement of Cash Flows (Interest and Dividends)
Development Costs (R&D)
48. Percentage of completion and completed contract method allowed.
Marketable Securities - Classification
Indirect Costs of Lease
Extraordinary Items
Construction Contracts
49. Considered non-compensatory if they meet certain requirements.
Accounting for Stock Issued to Employees
Convertible Bonds
Accounting Changes
Comprehensive Income (Presentation)
50. 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.
Pension Plan Liability
Revenue Recognition
Segment Reporting
Pension Plan Cost