Test your basic knowledge |

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. All adjustments for changes in deferred tax balances due to changes in tax laws or rates are recognized on the income statement.






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






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






4. Revaluation is not permitted.






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






6. 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.






7. 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 : (






8. 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.






9. 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






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






11. Segment profit or loss - assets.






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






13. 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.






14. Cost method or legal (par) method.






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






16. 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






17. Lower of cost or market.






18. 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






19. 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.






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. Slight variation from year-end reporting.






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






23. 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.






24. 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






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

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






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






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






29. 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.






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






31. Enacted tax rate only.






32. No classification






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






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






35. May not be capitalized.






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






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






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. No impracticality exception for error corrections.






40. 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).






41. 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.






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. 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.






44. 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.






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






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






47. 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.






48. No requirement for explicitly stating following US GAAP.






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






50. 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







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