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






2. Percentage of completion and completed contract method allowed.






3. 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).






4. 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.






5. Cost method or legal (par) method.






6. 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.






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






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






9. 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.






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






11. 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






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






13. 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






14. Enacted tax rate only.






15. 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






16. 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 : (






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






18. No impracticality exception for error corrections.






19. Slight variation from year-end reporting.






20. Revaluation is not permitted.






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






22. 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






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






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






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






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






27. Enacted tax rate only.






28. Lower of cost or market.






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






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






31. May not be capitalized.






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






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






34. Segment profit or loss - assets.






35. All gains and losses included in OCI






36. No classification






37. 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.






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






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






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






41. 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






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






43. 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.






44. No requirement for explicitly stating following US GAAP.






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






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






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


48. 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.






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






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