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. 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.






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






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






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






5. Enacted tax rate only.






6. 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.






7. Enacted tax rate only.






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






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






10. 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.






11. Slight variation from year-end reporting.






12. 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.






13. 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.






14. 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.






15. 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






16. 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 : (






17. No impracticality exception for error corrections.






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






19. No requirement for explicitly stating following US GAAP.






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






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






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






24. 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






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






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






27. 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.






28. Segment profit or loss - assets.






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






30. Percentage of completion and completed contract method allowed.






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






32. 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






33. 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






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. Revaluation is not permitted.






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






37. 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.






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


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






40. 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






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






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






43. 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






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






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






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






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






48. 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.






49. 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.






50. No classification