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. No classification






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






3. All gains and losses included in OCI






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






5. 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.






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






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






8. 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






9. Enacted tax rate only.






10. 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.






11. 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.






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






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






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






15. 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






16. 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






17. 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






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






19. 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.






20. Enacted tax rate only.






21. 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.






22. 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.






23. Revaluation is not permitted.






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






25. 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.






26. 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.






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. Cost method or legal (par) method.






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






30. Percentage of completion and completed contract method allowed.






31. 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.






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






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






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






35. 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.






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






37. 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.






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






39. 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.






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






41. Slight variation from year-end reporting.






42. No requirement for explicitly stating following US GAAP.






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






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






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






46. Segment profit or loss - assets.






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






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






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


50. 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).