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






2. 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






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






4. 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






5. 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






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






7. Slight variation from year-end reporting.






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






9. Cost method or legal (par) method.






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






11. No classification






12. 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.






13. 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






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






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


16. 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.






17. 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.






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






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






20. No impracticality exception for error corrections.






21. Percentage of completion and completed contract method allowed.






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






23. 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.






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






25. May not be capitalized.






26. Enacted tax rate only.






27. 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.






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. 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.






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






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






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






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






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






35. 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.






36. 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.






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






38. Enacted tax rate only.






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






40. 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






41. 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






42. 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.






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






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






45. 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.






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






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






48. 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.






49. 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.






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