Test your basic knowledge |

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. 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.






2. 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).






3. 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.






4. Percentage of completion and completed contract method allowed.






5. 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






6. 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.






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






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






9. Enacted tax rate only.






10. Segment profit or loss - assets.






11. Revaluation is not permitted.






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






13. Cost method or legal (par) method.






14. 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.






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






16. Lower of cost or market.






17. May not be capitalized.






18. 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 : (






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






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






21. 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.






22. 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






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






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






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






26. 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.






27. 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






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






29. 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.






30. 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.






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






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






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

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34. 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






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






36. 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.






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






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






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






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






41. 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.






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






43. No impracticality exception for error corrections.






44. 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






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






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






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






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






49. Enacted tax rate only.






50. 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







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