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






2. 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.






3. Segment profit or loss - assets.






4. No impracticality exception for error corrections.






5. 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.






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






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






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






9. May not be capitalized.






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






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






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






13. No requirement for explicitly stating following US GAAP.






14. Slight variation from year-end reporting.






15. Enacted tax rate only.






16. Enacted tax rate only.






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






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






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






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






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






22. No classification






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






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






25. 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.






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






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






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






29. 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.






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






31. 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






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






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






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






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






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






41. 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.






42. 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






43. 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.






44. Revaluation is not permitted.






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

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46. 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.






47. 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.






48. 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.






49. 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.






50. Percentage of completion and completed contract method allowed.