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. 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.






2. 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 : (






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






4. Segment profit or loss - assets.






5. 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.






6. 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






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






8. 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






9. 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).






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






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






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






13. Enacted tax rate only.






14. 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.






15. 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






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






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






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






19. May not be capitalized.






20. 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.






21. No requirement for explicitly stating following US GAAP.






22. 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.






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






24. Revaluation is not permitted.






25. 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.






26. Enacted tax rate only.






27. 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.






28. 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






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






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






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






32. Slight variation from year-end reporting.






33. 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






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






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






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






37. Cost method or legal (par) method.






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






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






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






41. 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.






42. 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.






43. 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.






44. 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.






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






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






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






48. No impracticality exception for error corrections.






49. 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






50. 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.