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






2. Slight variation from year-end reporting.






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


5. May not be capitalized.






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






7. No impracticality exception for error corrections.






8. Enacted tax rate only.






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






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






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






12. Revaluation is not permitted.






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






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






15. No requirement for explicitly stating following US GAAP.






16. 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






17. 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.






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. All gains and losses included in OCI






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






21. Segment profit or loss - assets.






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






23. Enacted tax rate only.






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






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






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






27. 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






28. 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.






29. 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.






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






31. 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.






32. Lower of cost or market.






33. 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.






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






35. 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.






36. 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.






37. 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






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






39. 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






40. 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.






41. Percentage of completion and completed contract method allowed.






42. 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.






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






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






45. 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 : (






46. Cost method or legal (par) method.






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






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






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






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