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






2. No requirement for explicitly stating following US GAAP.






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

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4. 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






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






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






7. Segment profit or loss - assets.






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






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






10. 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.






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






12. 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.






13. All gains and losses included in OCI






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






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






16. 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.






17. 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).






18. May not be capitalized.






19. 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






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






21. 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






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






23. 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.






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






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






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






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






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.






29. 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 : (






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






31. Projection benefit obligation (PBO) is the defined benefit pension plan liability.






32. Enacted tax rate only.






33. 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.






34. Enacted tax rate only.






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






36. No impracticality exception for error corrections.






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






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. Considered non-compensatory if they meet certain requirements.






40. 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.






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






42. 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.






43. Slight variation from year-end reporting.






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






45. Revaluation is not permitted.






46. 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.






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






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






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






50. 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