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






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






3. May not be capitalized.






4. Cost method or legal (par) method.






5. 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






6. 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.






7. 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.






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






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






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


11. 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).






12. 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.






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






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






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






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






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






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






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






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






21. 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.






22. 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.






23. 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.






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






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






26. 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






27. Lower of cost or market.






28. Slight variation from year-end reporting.






29. Enacted tax rate only.






30. No requirement for explicitly stating following US GAAP.






31. 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.






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






33. Percentage of completion and completed contract method allowed.






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






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






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






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. All gains and losses included in OCI






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






40. No classification






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






42. Segment profit or loss - assets.






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






44. No impracticality exception for error corrections.






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






46. 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






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






48. 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






49. Revaluation is not permitted.






50. 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 : (