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. 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.






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






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






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






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






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






7. Segment profit or loss - assets.






8. 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






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






10. Percentage of completion and completed contract method allowed.






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. 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).






13. 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






14. 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






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






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






17. All gains and losses included in OCI






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






19. 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 : (






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






21. No impracticality exception for error corrections.






22. Cost method or legal (par) method.






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

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






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






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






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






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






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






30. 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






31. Lower of cost or market.






32. 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.






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






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






35. 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






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






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






38. 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.






39. 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.






40. 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.






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






42. 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.






43. Revaluation is not permitted.






44. 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.






45. May not be capitalized.






46. 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.






47. 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.






48. 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.






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






50. 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