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






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






3. 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






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






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






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






7. Segment profit or loss - assets.






8. 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.






9. No requirement for explicitly stating following US GAAP.






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






11. 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






12. 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.






13. 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






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






15. 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






16. 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.






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


18. 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






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






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






21. Enacted tax rate only.






22. 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.






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






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






25. 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.






26. 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






27. 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.






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






29. 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.






30. No classification






31. 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.






32. 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.






33. Lower of cost or market.






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






35. 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.






36. 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






37. Cost method or legal (par) method.






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. All gains and losses included in OCI






41. 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.






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






43. Recorded as an asset and amortized using the straight-line method.






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






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






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






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






49. Enacted tax rate only.






50. 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