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






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






3. Revaluation is not permitted.






4. All gains and losses included in OCI






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






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






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






9. 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.






10. 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.






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






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






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


14. Enacted tax rate only.






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






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






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






18. 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.






19. 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






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






21. 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.






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






23. 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






24. 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.






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






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






27. 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).






28. No classification






29. 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






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






31. 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






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






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






34. Cost method or legal (par) method.






35. Lower of cost or market.






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






37. No impracticality exception for error corrections.






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






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






40. 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 : (






41. 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.






42. 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.






43. 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.






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






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






46. 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






47. Enacted tax rate only.






48. Slight variation from year-end reporting.






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






50. 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.