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






2. 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






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






4. 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






5. Cost method or legal (par) method.






6. All gains and losses included in OCI






7. Enacted tax rate only.






8. 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.






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






10. 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






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






12. 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






13. 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.






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






16. 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.






17. No classification






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






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






20. 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.






21. 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.






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






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






24. 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 : (






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






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






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






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. 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.






30. Slight variation from year-end reporting.






31. 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.






32. 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






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






34. 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






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






36. Lower of cost or market.






37. Enacted tax rate only.






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






39. Percentage of completion and completed contract method allowed.






40. 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






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






42. Funded status is reported of an overfunded pension plan is reported in full as a noncurrent asset. Underfunded plans are reported as current - non-current - or both.






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






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






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






46. 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.






47. Segment profit or loss - assets.






48. May not be capitalized.






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






50. 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