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Test your basic knowledge |
U.S. GAAP
Start Test
Study First
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. Includes disclosure of significant estimates but not judgments made in preparing the financial statements.
Notes to the Financial Statements
Gains and Losses on Pensions
Financial Instruments (Initial Recognition)
Reporting of Deferred Taxes
2. 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.
Construction Contracts
Gains and Losses on Pensions
Interim Financial Reporting
Accounting for Income Taxes (Valuation)
3. Indirect direct costs paid by the lessee are expensed when incurred.
Statement of Changes in Shareholders' Equity
Interim Financial Reporting Requirements
Indirect Costs of Lease
Statement of Cash Flows (Method)
4. Recognition of gains is dependent on the rights of the leased property retained by the seller-lessee.
Fixed Asset Impairment
Goodwill Impairment
Sale-Leaseback Transactions
Reporting of Pension Cost
5. When the direct method is used - entities are required to present a reconciliation of net income to net cash flows from operating activities.
Marketable Securities - Available-For-Sale
Accounting Changes
Statement of Cash Flows (Method)
Accounting for Adjustments in Tax Rates
6. 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.
Pension Plan Cost
Convertible Bonds
Sale-Leaseback Transactions
Interim Financial Reporting Tax Rates
7. 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.
Comprehensive Income (Revaluation)
Marketable Securities - Available-For-Sale
Notes to the Financial Statements
Reporting of Remeasurements
8. Lower of cost or market.
Inventory Valuation
Statement of Cash Flows (Cash)
Disclosure of Financial Instruments
Gains and Losses on Pensions
9. 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
Nonmonetary Exchanges
Convertible Bonds
Inventory Valuation
Construction Contracts
10. Recorded as an asset and amortized using the straight-line method.
Pension Plan Liability
Bond Issue Costs
Indirect Costs of Lease
Accounting for Adjustments in Tax Rates
11. 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.
Change in Accounting Entity
Financial Instruments (Fair Value)
Development Costs (R&D)
Capital (Finance) Lease Criteria
12. No classification
Accounting Changes
Subsequent Events
Error Correction
Investment Property
13. No separate recognition is given to the conversion feature when convertible bonds are issued. Bonds are recorded in same manner as non-convertible bonds.
Conceptual Framework
Extraordinary Items
Capital (Finance) Lease Criteria
Convertible Bonds
14. FASB has not yet issued a pronouncement on convergence with IASB.
Convertible Bonds
Notes to the Financial Statements
Intangible Assets
Financial Instruments (Initial Recognition)
15. 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.
Development Costs (R&D)
Related Party Transactions
Foreign Currency Translation
Funded Status of Pension Plan
16. 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.
Comprehensive Income (Revaluation)
Marketable Securities - Classification
Risks and Uncertainties
Capital (Finance) Lease Criteria
17. Slight variation from year-end reporting.
Interim Financial Reporting Requirements
Extraordinary Items
Interim Financial Reporting
Segment Reporting
18. 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.
Revenue Recognition
Diluted EPS
Prior Service Cost
Financial Instruments (Fair Value)
19. Percentage of completion and completed contract method allowed.
Accounting for Adjustments in Tax Rates
Subsequent Events
Fixed Asset Depreciation
Construction Contracts
20. Unusual in nature and infrequence in occurrence and material.
Extraordinary Items
Interim Financial Reporting Tax Rates
Variable Interest Entity
Accounting for Income Taxes (Valuation)
21. Projection benefit obligation (PBO) is the defined benefit pension plan liability.
Error Correction
Pension Plan Liability
Notes to the Financial Statements
Marketable Securities - Classification
22. 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.
Goodwill Impairment
Notes to the Financial Statements
Error Correction
Fixed Asset Impairment
23. Components of net periodic pension cost must be aggregated and presented as one amount on the income statement.
Reporting of Pension Cost
Conceptual Framework
Fixed Asset Valuation
Disclosure of Financial Instruments
24. Not required to match consumption. No requirement to review method - life - or salvage value at year end. Can use composite or component depreciation.
Impairment of Intangible Assets Other Than Goodwill
Bond Discount/Premium Amortization
Extraordinary Items
Fixed Asset Depreciation
25. Research and development costs expensed - reported using the cost model only.
Statement of Cash Flows (Method)
Statement of Cash Flows (Cash)
Marketable Securities - Available-For-Sale
Intangible Assets
26. Entities cannot apply the FASB conceptual framework to specific accounting issues
Accounting for Adjustments in Tax Rates
Fixed Asset Impairment
Conceptual Framework
Intangible Assets
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
Financial Instruments (Fair Value)
Reporting of Remeasurements
Interim Financial Reporting
Risks and Uncertainties
28. 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.
Accounting for Stock Issued to Employees
Funded Status of Pension Plan
Marketable Securities - Available-For-Sale
Accounting Changes
29. 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
Comprehensive Income (Revaluation)
Statement of Cash Flows (Cash)
Subsequent Events
Statement of Cash Flows (Interest and Dividends)
30. Enacted tax rate only.
Comprehensive Income (Presentation)
Sale-Leaseback Transactions
Interim Financial Reporting Requirements
Use of Tax Rates
31. 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.
Accounting for Income Taxes (Valuation)
Marketable Securities - Available-For-Sale
Marketable Securities - Impairment
Marketable Securities - Classification
32. Remeasurement method must be used when a foreign subsidiary is operating in a highly inflationary environment.
Use of Tax Rates
Inventory Valuation
Bond Issue Costs
Foreign Currency Translation
33. All gains and losses included in OCI
Statement of Changes in Shareholders' Equity
Marketable Securities - Available-For-Sale
Pension Plan Cost
Prior Service Cost
34. Revaluation is not permitted.
Interim Financial Reporting Tax Rates
Notes to the Financial Statements
Sale-Leaseback Transactions
Comprehensive Income (Revaluation)
35. Cost model: historical - accum. depr. = impairment
Fixed Asset Valuation
Disclosure of Financial Instruments
Indirect Costs of Lease
Reporting of Deferred Taxes
36. (Balance sheet - income statement - SOCF) as of the most recent fiscal quarter and as of the end of the preceding fiscal year.
Error Correction
Computer and Software Development Costs
Interim Financial Reporting Requirements
Indirect Costs of Lease
37. 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.
Revenue Recognition
Fixed Asset Impairment
Bond Discount/Premium Amortization
Fixed Asset Valuation
38. Costs before technological feasibility must be expensed - costs after technological feasibility are capitalized.
Investment Property
Convertible Bonds
Computer and Software Development Costs
Foreign Currency Translation
39. Lessees--operating or capital leases. Lessors--operating - sales-type - or direct financing leases.
Marketable Securities - Available-For-Sale
Related Party Transactions
Lease Classification
Goodwill Impairment
40. Recognized in a two-step process: (1) recognition of the tax benefit (2) measurement of the tax benefit.
Uncertain Tax Positions
Financial Instruments (Fair Value)
Reporting of Remeasurements
Extraordinary Items
41. Considered non-compensatory if they meet certain requirements.
Funded Status of Pension Plan
Accounting for Stock Issued to Employees
Fixed Asset Depreciation
Disclosure of Financial Instruments
42. Bank overdrafts are excluded from cash and classified as financing cash flows.
Bond Issue Costs
Statement of Cash Flows (Method)
Contingent Liability
Statement of Cash Flows (Cash)
43. Interest and dividends received - interest paid and taxes paid are CFO. Dividends paid are classified as CFF.
Prior Service Cost
Capital (Finance) Lease Criteria
Statement of Cash Flows (Cash)
Statement of Cash Flows (Interest and Dividends)
44. May be presented as a primary financial statement or in the notes of the financial statement.
45. No impracticality exception for error corrections.
Error Correction
Treasury Stock
Contingent Liability
Statement of Changes in Shareholders' Equity
46. All adjustments for changes in deferred tax balances due to changes in tax laws or rates are recognized on the income statement.
Accounting for Adjustments in Tax Rates
Statement of Cash Flows (Method)
Treasury Stock
Inventory Valuation
47. 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.
Prior Service Cost
Statement of Cash Flows (Interest and Dividends)
Treasury Stock
Segment Reporting
48. Segment profit or loss - assets.
Marketable Securities - Classification
Segment Reporting
Fixed Asset Impairment
Conceptual Framework
49. No requirement for disclosure of key management compensation arrangements.
Variable Interest Entity
Conceptual Framework
Related Party Transactions
Accounting for Income Taxes (Valuation)
50. 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.
Investment Property
Sale-Leaseback Transactions
Comprehensive Income (Presentation)
Consolidation - Parent and Subsidiary with Different Year-Ends
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