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






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






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






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






5. 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






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






7. Cost method or legal (par) method.






8. 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.






9. 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.






10. 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.






11. Percentage of completion and completed contract method allowed.






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






13. 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.






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






15. Enacted tax rate only.






16. All gains and losses included in OCI






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






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






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






20. Revaluation is not permitted.






21. May not be capitalized.






22. 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.






23. 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






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






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






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






27. 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.






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






29. No classification






30. 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






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






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






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






34. No impracticality exception for error corrections.






35. Lower of cost or market.






36. 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.






37. Segment profit or loss - assets.






38. 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






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






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






41. 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.






42. Slight variation from year-end reporting.






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






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






45. 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.






46. No requirement for explicitly stating following US GAAP.






47. 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).






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






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






50. 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