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 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






2. All gains and losses included in OCI






3. 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






4. May not be capitalized.






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






6. 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.






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






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






9. 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.






10. 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






11. 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.






12. 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.






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






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






15. No classification






16. 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).






17. 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.






18. No requirement for explicitly stating following US GAAP.






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






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. No requirement for disclosure of key management compensation arrangements.






22. 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.






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






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






25. Enacted tax rate only.






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






27. 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.






28. 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.






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






30. Lower of cost or market.






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






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






34. Cost method or legal (par) method.






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






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






37. 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






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


39. Segment profit or loss - assets.






40. 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






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






42. Percentage of completion and completed contract method allowed.






43. 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.






44. 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






45. 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






46. No impracticality exception for error corrections.






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






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






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






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