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. 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.






2. 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.






3. 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






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






5. 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






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

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7. 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).






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






9. 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






10. 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.






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






12. 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.






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






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






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






16. 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






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






18. 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.






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






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






21. Segment profit or loss - assets.






22. Lower of cost or market.






23. Enacted tax rate only.






24. 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.






25. 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.






26. 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.






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






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






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






30. 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.






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






32. 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






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






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






35. Enacted tax rate only.






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






37. No requirement for explicitly stating following US GAAP.






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






39. All gains and losses included in OCI






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






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. Slight variation from year-end reporting.






43. May not be capitalized.






44. 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






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






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






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






48. 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






49. 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.






50. Percentage of completion and completed contract method allowed.