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






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






4. No impracticality exception for error corrections.






5. Slight variation from year-end reporting.






6. Segment profit or loss - assets.






7. 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.






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






9. 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






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






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






12. 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.






13. 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.






14. 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.






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






16. 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.






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






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






19. 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






20. 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






21. Enacted tax rate only.






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






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






24. 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.






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






26. 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.






27. 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






28. No classification






29. No requirement for explicitly stating following US GAAP.






30. May not be capitalized.






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






32. 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 : (






33. 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.






34. Percentage of completion and completed contract method allowed.






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






36. 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.






37. 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.






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






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






40. 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.






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


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






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






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






45. 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






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






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






48. 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.






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






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