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






2. 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.






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






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






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






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






7. Percentage of completion and completed contract method allowed.






8. Lower of cost or market.






9. Revaluation is not permitted.






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






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






12. No classification






13. 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.






14. 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.






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






16. 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.






17. 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.






18. 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






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






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






21. 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.






22. 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.






23. 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).






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






25. 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.






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






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


28. 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






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






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






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






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






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






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






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






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






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






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






39. 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.






40. Enacted tax rate only.






41. Slight variation from year-end reporting.






42. 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






43. Enacted tax rate only.






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






45. No impracticality exception for error corrections.






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






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






48. Segment profit or loss - assets.






49. 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






50. All gains and losses included in OCI