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. Lower of cost or market.






2. 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.






3. 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






4. 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.






5. Percentage of completion and completed contract method allowed.






6. 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.






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






8. 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.






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






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






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






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






13. Revaluation is not permitted.






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






15. 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.






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. Enacted tax rate only.






18. May not be capitalized.






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






20. 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 : (






21. 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.






22. Segment profit or loss - assets.






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






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






25. Slight variation from year-end reporting.






26. 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.






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






28. 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.






29. 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.






30. No requirement for explicitly stating following US GAAP.






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






32. 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.






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






35. No impracticality exception for error corrections.






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


37. 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






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






39. All gains and losses included in OCI






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






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






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






44. Cost method or legal (par) method.






45. 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






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






47. 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






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






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






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