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






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






3. No impracticality exception for error corrections.






4. 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.






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






6. Cost method or legal (par) method.






7. 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






8. 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.






9. No classification






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






11. 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.






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






13. All gains and losses included in OCI






14. 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






15. 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.






16. Percentage of completion and completed contract method allowed.






17. 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






18. 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.






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






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






21. 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.






22. 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






23. 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






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






25. No requirement for explicitly stating following US GAAP.






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






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






28. Lower of cost or market.






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






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






31. 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.






32. 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






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






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






36. 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






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. 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 : (






39. Enacted tax rate only.






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






41. 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.






42. May not be capitalized.






43. 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.






44. 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).






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






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






48. Enacted tax rate only.






49. Revaluation is not permitted.






50. Segment profit or loss - assets.