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






3. 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






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






5. 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






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






7. Percentage of completion and completed contract method allowed.






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






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






10. 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.






11. May not be capitalized.






12. 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.






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






14. 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.






15. All gains and losses included in OCI






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






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






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






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






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






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. 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.






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






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






25. 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






26. No requirement for explicitly stating following US GAAP.






27. 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).






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






29. 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.






30. 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






31. 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.






32. 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.






33. 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.






34. Cost method or legal (par) method.






35. No impracticality exception for error corrections.






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






37. 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






38. 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






39. Enacted tax rate only.






40. 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.






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






42. Revaluation is not permitted.






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






44. Slight variation from year-end reporting.






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






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






47. No classification






48. 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.






49. Enacted tax rate only.






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