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






2. 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






3. 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.






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






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


6. 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.






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






8. 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.






9. Revaluation is not permitted.






10. 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






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






12. All gains and losses included in OCI






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






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






15. No impracticality exception for error corrections.






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






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






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






19. 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 : (






20. 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.






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






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






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






24. 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).






25. 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.






26. 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






27. Enacted tax rate only.






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






29. 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






30. 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






31. 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.






32. 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.






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






34. No requirement for explicitly stating following US GAAP.






35. 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






36. 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.






37. 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






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






39. Lower of cost or market.






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






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






42. 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.






43. 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.






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






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






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






47. Slight variation from year-end reporting.






48. No classification






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






50. Segment profit or loss - assets.