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. No classification






2. 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






3. Slight variation from year-end reporting.






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






5. 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).






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






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. 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.






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






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






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






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






13. 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






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






15. Lower of cost or market.






16. 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






17. Revaluation is not permitted.






18. 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.






19. 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






20. 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






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






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






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






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






25. Enacted tax rate only.






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






27. 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.






28. Percentage of completion and completed contract method allowed.






29. Cost method or legal (par) method.






30. 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






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






32. 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.






33. 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.






34. Segment profit or loss - assets.






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






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






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






38. 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.






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






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






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


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






43. 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






44. 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.






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






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






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






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






50. 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 : (