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






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






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






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






5. 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.






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






7. 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.






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






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






10. 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.






11. 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






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






13. Percentage of completion and completed contract method allowed.






14. 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






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






16. Enacted tax rate only.






17. Segment profit or loss - assets.






18. Slight variation from year-end reporting.






19. 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.






20. No classification






21. 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.






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






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






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






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






26. 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






27. 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).






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






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






30. No requirement for disclosure of key management compensation arrangements.






31. 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






32. 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.






33. 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






34. May not be capitalized.






35. 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.






36. 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.






37. 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






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






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






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






42. Revaluation is not permitted.






43. 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 : (






44. Lower of cost or market.






45. All gains and losses included in OCI






46. 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.






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. 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.






49. 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.






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