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. 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.






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






3. No impracticality exception for error corrections.






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






5. 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.






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






7. 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






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. 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






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






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. 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






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






14. May not be capitalized.






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






16. 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).






17. Lower of cost or market.






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


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






20. 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.






21. 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.






22. 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.






23. Enacted tax rate only.






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






25. 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.






26. Revaluation is not permitted.






27. 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






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






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. 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.






31. 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.






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






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






34. 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.






35. 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






36. Slight variation from year-end reporting.






37. 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.






38. 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.






39. No requirement for explicitly stating following US GAAP.






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






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






42. 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.






43. Cost method or legal (par) method.






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






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






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






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






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






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






50. Enacted tax rate only.