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






2. No impracticality exception for error corrections.






3. Segment profit or loss - assets.






4. No classification






5. 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.






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






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






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






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






11. Enacted tax rate only.






12. 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.






13. Cost model: historical - accum. depr. = impairment






14. Slight variation from year-end reporting.






15. No requirement for explicitly stating following US GAAP.






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






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






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






19. 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.






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






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






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






24. 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.






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






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






27. Cost method or legal (par) method.






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






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. Considered non-compensatory if they meet certain requirements.






31. 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.






32. 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






33. 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






34. 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.






35. Revaluation is not permitted.






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






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






38. 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






39. 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






40. 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).






41. 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






42. 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.






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






44. All gains and losses included in OCI






45. 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.






46. 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






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






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






49. 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






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