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. Slight variation from year-end reporting.






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






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






4. Enacted tax rate only.






5. 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.






6. 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.






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. 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






10. 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.






11. 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.






12. 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






13. Enacted tax rate only.






14. Segment profit or loss - assets.






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






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






17. 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






18. 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.






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






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






21. Cost method or legal (par) method.






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






23. 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.






24. 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.






25. Lower of cost or market.






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






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






28. 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.






29. 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.






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






31. All gains and losses included in OCI






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






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






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






35. Revaluation is not permitted.






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






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






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






39. No classification






40. 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.






41. 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.






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






43. May not be capitalized.






44. 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






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






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






47. 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 : (






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






49. 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






50. 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.