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






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






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






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






6. 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.






7. 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.






8. Lower of cost or market.






9. 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






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






11. 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.






12. No classification






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






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






15. 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.






16. 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.






17. Slight variation from year-end reporting.






18. 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.






19. Percentage of completion and completed contract method allowed.






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






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






22. 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.






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






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






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






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






27. 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






28. 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.






29. 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






30. Enacted tax rate only.






31. 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.






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






33. All gains and losses included in OCI






34. Revaluation is not permitted.






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






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






37. 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.






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






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






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






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






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






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






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


45. No impracticality exception for error corrections.






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






47. 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.






48. Segment profit or loss - assets.






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






50. 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.






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