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






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






3. 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.






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






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






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






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






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






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






10. Percentage of completion and completed contract method allowed.






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






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






14. May not be capitalized.






15. 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.






16. 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.






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






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






19. 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.






20. No requirement for explicitly stating following US GAAP.






21. 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.






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






23. Revaluation is not permitted.






24. No impracticality exception for error corrections.






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






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






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






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






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. 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.






31. Cost method or legal (par) method.






32. Segment profit or loss - assets.






33. 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.






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






35. 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.






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






37. 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






38. 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.






39. 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






40. Lower of cost or market.






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






42. All gains and losses included in OCI






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






44. Enacted tax rate only.






45. 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.






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






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






48. 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.






49. 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






50. 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.