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. Percentage of completion and completed contract method allowed.






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






3. No impracticality exception for error corrections.






4. 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.






5. 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.






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






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






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






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






10. 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






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






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






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






14. 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.






15. May not be capitalized.






16. Slight variation from year-end reporting.






17. 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






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






19. No classification






20. 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.






21. No requirement for explicitly stating following US GAAP.






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






23. 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






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






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


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






27. Cost method or legal (par) method.






28. 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.






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






30. 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.






31. 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.






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






33. 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






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






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






36. 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






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






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






39. Enacted tax rate only.






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. 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






42. Revaluation is not permitted.






43. 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






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






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






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






47. 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.






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






49. 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






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