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 cannot apply the FASB conceptual framework to specific accounting issues






2. No classification






3. 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.






4. Considered non-compensatory if they meet certain requirements.






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






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






7. May not be capitalized.






8. 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.






9. Percentage of completion and completed contract method allowed.






10. 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






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






12. All gains and losses included in OCI






13. 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.






14. 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.






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






16. 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.






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






18. 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.






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






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






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






22. 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






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






24. Enacted tax rate only.






25. 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






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






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






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






29. Enacted tax rate only.






30. 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






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






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






33. 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 : (






34. 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






35. Slight variation from year-end reporting.






36. 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






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






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






39. 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).






40. 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






41. Cost method or legal (par) method.






42. Lower of cost or market.






43. Revaluation is not permitted.






44. 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.






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


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






47. 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.






48. 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.






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






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