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. 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.






2. 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.






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






4. 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.






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






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






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






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






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






10. 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






11. 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.






12. No impracticality exception for error corrections.






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






14. No requirement for explicitly stating following US GAAP.






15. 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






16. No classification






17. 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.






18. 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






19. Lower of cost or market.






20. Enacted tax rate only.






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






22. Slight variation from year-end reporting.






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. 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






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






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






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. Revaluation is not permitted.






29. 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.






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






31. 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).






32. 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.






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






34. 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.






35. Segment profit or loss - assets.






36. Enacted tax rate only.






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. 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.






39. 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.






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






41. 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.






42. 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






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






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






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






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






47. Percentage of completion and completed contract method allowed.






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






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


50. All gains and losses included in OCI