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. 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.






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






3. 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.






4. 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.






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






6. No classification






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






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






9. Cost method or legal (par) method.






10. 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).






11. 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






12. 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.






13. 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






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






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






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






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






18. 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






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






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






21. Percentage of completion and completed contract method allowed.






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






23. 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.






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






25. No requirement for explicitly stating following US GAAP.






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.






27. Slight variation from year-end reporting.






28. 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.






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






30. All gains and losses included in OCI






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






32. 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.






33. May not be capitalized.






34. 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






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






36. Enacted tax rate only.






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






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






39. Revaluation is not permitted.






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






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. 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.






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






44. 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.






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


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. 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.






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






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






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