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. 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.






2. Lower of cost or market.






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






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






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






6. 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.






7. Cost method or legal (par) method.






8. Enacted tax rate only.






9. Percentage of completion and completed contract method allowed.






10. No impracticality exception for error corrections.






11. 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.






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






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






14. 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.






15. 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.






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






17. Segment profit or loss - assets.






18. 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.






19. 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






20. No classification






21. 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






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






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






24. Slight variation from year-end reporting.






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






26. 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.






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






28. 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






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






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






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






32. 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).






33. 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.






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






35. 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






36. 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






37. 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.






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






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






40. Revaluation is not permitted.






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






42. No requirement for explicitly stating following US GAAP.






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. 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.






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






46. 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.






47. 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.






48. Enacted tax rate only.






49. All gains and losses included in OCI






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