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






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






3. 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






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






5. 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






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






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






8. 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.






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






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






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






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






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






14. 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






15. 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






16. 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






17. 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.






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






19. 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.






20. 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.






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






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






23. 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.






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






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


26. Percentage of completion and completed contract method allowed.






27. Enacted tax rate only.






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






29. No classification






30. Lower of cost or market.






31. No impracticality exception for error corrections.






32. Slight variation from year-end reporting.






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






34. 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.






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






36. Cost method or legal (par) method.






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






38. 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.






39. Enacted tax rate only.






40. May not be capitalized.






41. 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






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






43. Revaluation is not permitted.






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






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






46. 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.






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






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






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. 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