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. No impracticality exception for error corrections.






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






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






4. 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






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






6. 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.






7. Cost method or legal (par) method.






8. 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






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






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






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






12. 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.






13. Lower of cost or market.






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






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






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


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






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






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






20. 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.






21. 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.






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






23. Enacted tax rate only.






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






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






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






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






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. All gains and losses included in OCI






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






31. 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.






32. 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.






33. 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






34. 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.






35. 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.






36. May not be capitalized.






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






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






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. Percentage of completion and completed contract method allowed.






42. Slight variation from year-end reporting.






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






44. Revaluation is not permitted.






45. 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






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






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






48. 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 : (






49. 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.






50. Segment profit or loss - assets.