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. 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.






2. 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.






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






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






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






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. No requirement for explicitly stating following US GAAP.






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






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






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






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






13. 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).






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






15. 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






16. 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 : (






17. 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






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






19. Enacted tax rate only.






20. No classification






21. All gains and losses included in OCI






22. May not be capitalized.






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






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






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


26. 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.






27. 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.






28. 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






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






30. 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.






31. 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.






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






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






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






35. 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.






36. Segment profit or loss - assets.






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






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






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






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






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






42. 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.






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






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






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






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






47. 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






48. 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.






49. Slight variation from year-end reporting.






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