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






2. 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.






3. 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






4. 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.






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

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6. 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






7. 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).






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






9. 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.






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






11. 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.






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






13. Enacted tax rate only.






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






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






16. No requirement for explicitly stating following US GAAP.






17. 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






18. 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.






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






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






21. 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.






22. 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






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






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






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






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






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






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






29. Percentage of completion and completed contract method allowed.






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






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






32. 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






33. 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.






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






35. Segment profit or loss - assets.






36. May not be capitalized.






37. 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 : (






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






39. Cost method or legal (par) method.






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






41. 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






42. 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.






43. Slight variation from year-end reporting.






44. Enacted tax rate only.






45. Entities are required to disclose concentrations of credit risk. Market risk disclosures are optional.






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






47. 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.






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






49. Lower of cost or market.






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