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. 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 : (






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






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






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






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






6. 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).






7. 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






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






9. Enacted tax rate only.






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






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






12. 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






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






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






15. 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






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






17. No classification






18. Cost method or legal (par) method.






19. 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.






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






21. 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






22. All gains and losses included in OCI






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






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






25. 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.






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






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






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






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






30. 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.






31. Enacted tax rate only.






32. 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.






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






34. Percentage of completion and completed contract method allowed.






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






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






37. 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






38. 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.






39. 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.






40. No impracticality exception for error corrections.






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






42. 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.






43. 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






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






45. Lower of cost or market.






46. Revaluation is not permitted.






47. 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.






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






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






50. No requirement for explicitly stating following US GAAP.