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. 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.






2. Cost method or legal (par) method.






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






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






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


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






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






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






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






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






11. 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.






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






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






16. 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






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






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






19. 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.






20. Revaluation is not permitted.






21. 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






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






23. All gains and losses included in OCI






24. May not be capitalized.






25. 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






26. 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






27. 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.






28. 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






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






30. Enacted tax rate only.






31. 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.






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






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






34. 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.






35. Lower of cost or market.






36. 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






37. 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






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






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






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






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






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






43. Segment profit or loss - assets.






44. No requirement for explicitly stating following US GAAP.






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






46. 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.






47. No classification






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. 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.






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