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Test your basic knowledge |
U.S. GAAP
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Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
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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. May not be capitalized.
Bond Issue Costs
Marketable Securities - Available-For-Sale
Interim Financial Reporting
Development Costs (R&D)
2. 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
Pension Plan Liability
Impairment of Intangible Assets Other Than Goodwill
Treasury Stock
Bond Issue Costs
3. Unusual in nature and infrequence in occurrence and material.
Reporting of Deferred Taxes
Comprehensive Income (Presentation)
Foreign Currency Translation
Extraordinary Items
4. 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.
Reporting of Deferred Taxes
Change in Accounting Entity
Nonmonetary Exchanges
Financial Instruments (Initial Recognition)
5. Research and development costs expensed - reported using the cost model only.
Bond Discount/Premium Amortization
Diluted EPS
Intangible Assets
Accounting for Stock Issued to Employees
6. Percentage of completion and completed contract method allowed.
Comprehensive Income (Revaluation)
Foreign Currency Translation
Construction Contracts
Sale-Leaseback Transactions
7. (Balance sheet - income statement - SOCF) as of the most recent fiscal quarter and as of the end of the preceding fiscal year.
Comprehensive Income (Revaluation)
Interim Financial Reporting Requirements
Extraordinary Items
Statement of Cash Flows (Cash)
8. Recognition of gains is dependent on the rights of the leased property retained by the seller-lessee.
Accounting for Stock Issued to Employees
Intangible Assets
Fixed Asset Depreciation
Sale-Leaseback Transactions
9. Projection benefit obligation (PBO) is the defined benefit pension plan liability.
Pension Plan Liability
Financial Instruments (Initial Recognition)
Lease Classification
Construction Contracts
10. 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.
Accounting Changes
Fixed Asset Depreciation
Risks and Uncertainties
Consolidation - Parent and Subsidiary with Different Year-Ends
11. 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 : (
Fixed Asset Depreciation
Interim Financial Reporting Tax Rates
Capital (Finance) Lease Criteria
Bond Issue Costs
12. Best method that clearly reflects periodic income. Does not need to have a rational relationship with the physical inventory flow. LFIO is permitted.
Prior Service Cost
Financial Instruments (Initial Recognition)
Inventory Cost Flow Assumptions
Pension Plan Liability
13. Classified as: (1) trading (2) available-for-sale (3) held-to-maturity
Marketable Securities - Classification
Reporting of Deferred Taxes
Comprehensive Income (Revaluation)
Inventory Cost Flow Assumptions
14. Not required to match consumption. No requirement to review method - life - or salvage value at year end. Can use composite or component depreciation.
Fixed Asset Depreciation
Intangible Assets
Gains and Losses on Pensions
Financial Instruments (Initial Recognition)
15. 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.
Pension Plan Liability
Notes to the Financial Statements
Marketable Securities - Impairment
Development Costs (R&D)
16. 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.
Related Party Transactions
Consolidation - Parent and Subsidiary with Different Year-Ends
Inventory Cost Flow Assumptions
Impairment of Intangible Assets Other Than Goodwill
17. Includes disclosure of significant estimates but not judgments made in preparing the financial statements.
Contingencies (Probable and Possible Definitions)
Segment Reporting
Comprehensive Income (Presentation)
Notes to the Financial Statements
18. 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.
Development Costs (R&D)
Statement of Cash Flows (Interest and Dividends)
Discontinued Operations
Accounting Changes
19. 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
Subsequent Events
Pension Plan Liability
Notes to the Financial Statements
Variable Interest Entity
20. Valuation allowance is recognized when it is more likely than not that part or all of the deferred tax asset will not be realized.
Marketable Securities - Available-For-Sale
Interim Financial Reporting Requirements
Accounting for Income Taxes (Valuation)
Financial Instruments (Initial Recognition)
21. Indirect direct costs paid by the lessee are expensed when incurred.
Indirect Costs of Lease
Interim Financial Reporting Requirements
Comprehensive Income (Presentation)
Uncertain Tax Positions
22. FASB has not yet issued a pronouncement on convergence with IASB.
Notes to the Financial Statements
Impairment of Intangible Assets Other Than Goodwill
Financial Instruments (Initial Recognition)
Nonmonetary Exchanges
23. Entities are required to disclose concentrations of credit risk. Market risk disclosures are optional.
Treasury Stock
Disclosure of Financial Instruments
Statement of Changes in Shareholders' Equity
Impairment of Intangible Assets Other Than Goodwill
24. No requirement for explicitly stating following US GAAP.
Fixed Asset Depreciation
Notes to the Financial Statements
Treasury Stock
Accounting for Stock Issued to Employees
25. Enacted tax rate only.
Interim Financial Reporting Tax Rates
Change in Accounting Entity
Development Costs (R&D)
Segment Reporting
26. 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.
Notes to the Financial Statements
Fixed Asset Impairment
Subsequent Events
Marketable Securities - Impairment
27. Interest and dividends received - interest paid and taxes paid are CFO. Dividends paid are classified as CFF.
Risks and Uncertainties
Bond Issue Costs
Statement of Cash Flows (Interest and Dividends)
Comprehensive Income (Revaluation)
28. 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
Revenue Recognition
Bond Issue Costs
Discontinued Operations
Gains and Losses on Pensions
29. 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
Foreign Currency Translation
Bond Issue Costs
Determining Functional Currency
30. Lessees--operating or capital leases. Lessors--operating - sales-type - or direct financing leases.
Bond Issue Costs
Statement of Changes in Shareholders' Equity
Lease Classification
Statement of Cash Flows (Method)
31. 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
Treasury Stock
Variable Interest Entity
Bond Issue Costs
Uncertain Tax Positions
32. Entities cannot apply the FASB conceptual framework to specific accounting issues
Use of Tax Rates
Accounting Changes
Conceptual Framework
Fixed Asset Impairment
33. 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.
Segment Reporting
Prior Service Cost
Marketable Securities - Available-For-Sale
Nonmonetary Exchanges
34. Recognized in a two-step process: (1) recognition of the tax benefit (2) measurement of the tax benefit.
Convertible Bonds
Extraordinary Items
Uncertain Tax Positions
Marketable Securities - Impairment
35. 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.
Comprehensive Income (Presentation)
Diluted EPS
Marketable Securities - Classification
Fixed Asset Depreciation
36. No impracticality exception for error corrections.
Marketable Securities - Impairment
Error Correction
Accounting for Adjustments in Tax Rates
Notes to the Financial Statements
37. Recorded as an asset and amortized using the straight-line method.
Construction Contracts
Financial Instruments (Fair Value)
Bond Issue Costs
Intangible Assets
38. Probable is defined as likely to occur and reasonably possible is defined as more likely than remote - but less than likely.
Contingencies (Probable and Possible Definitions)
Accounting for Adjustments in Tax Rates
Change in Accounting Entity
Marketable Securities - Impairment
39. No separate recognition is given to the conversion feature when convertible bonds are issued. Bonds are recorded in same manner as non-convertible bonds.
Nonmonetary Exchanges
Error Correction
Interim Financial Reporting Tax Rates
Convertible Bonds
40. 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.
Use of Tax Rates
Interim Financial Reporting Tax Rates
Pension Plan Cost
Diluted EPS
41. Cost model: historical - accum. depr. = impairment
Marketable Securities - Classification
Discontinued Operations
Financial Instruments (Fair Value)
Fixed Asset Valuation
42. 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.
Bond Discount/Premium Amortization
Computer and Software Development Costs
Subsequent Events
Segment Reporting
43. Slight variation from year-end reporting.
Interim Financial Reporting
Impairment of Intangible Assets Other Than Goodwill
Intangible Assets
Reporting of Deferred Taxes
44. Asset not required to be remeasures - but does get tested for impairment once classified as held-for-sale
Reporting of Deferred Taxes
Discontinued Operations
Fixed Asset Impairment
Convertible Bonds
45. Lower of cost or market.
Bond Issue Costs
Inventory Valuation
Funded Status of Pension Plan
Bond Discount/Premium Amortization
46. 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).
Interim Financial Reporting
Diluted EPS
Reporting of Deferred Taxes
Construction Contracts
47. Segment profit or loss - assets.
Segment Reporting
Inventory Cost Flow Assumptions
Reporting of Deferred Taxes
Statement of Changes in Shareholders' Equity
48. Revaluation is not permitted.
Gains and Losses on Pensions
Uncertain Tax Positions
Financial Instruments (Fair Value)
Comprehensive Income (Revaluation)
49. 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.
Gains and Losses on Pensions
Foreign Currency Translation
Inventory Cost Flow Assumptions
Accounting for Stock Issued to Employees
50. Considered non-compensatory if they meet certain requirements.
Marketable Securities - Classification
Accounting for Stock Issued to Employees
Consolidation - Parent and Subsidiary with Different Year-Ends
Error Correction