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. 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.






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






3. 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.






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






5. 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






6. Cost method or legal (par) method.






7. 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






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






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






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






11. Enacted tax rate only.






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






13. 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






14. Slight variation from year-end reporting.






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


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






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






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






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






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






21. Enacted tax rate only.






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






23. Segment profit or loss - assets.






24. All gains and losses included in OCI






25. No impracticality exception for error corrections.






26. 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.






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






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. 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.






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






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






32. Revaluation is not permitted.






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






34. May not be capitalized.






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






36. 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.






37. 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.






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. 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.






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






41. 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.






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






43. 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.






44. 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.






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






46. Lower of cost or market.






47. No classification






48. Percentage of completion and completed contract method allowed.






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






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.