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. 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.






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






3. 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






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






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






6. Revaluation is not permitted.






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






8. Cost method or legal (par) method.






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






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






11. 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.






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






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






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






15. 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 : (






16. 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.






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






18. 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.






19. No classification






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






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






22. Slight variation from year-end reporting.






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






24. 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






25. Segment profit or loss - assets.






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






27. 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






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






29. May not be capitalized.






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






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






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






33. All gains and losses included in OCI






34. 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).






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






36. 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






37. No impracticality exception for error corrections.






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






39. 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.






40. 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






41. Lower of cost or market.






42. 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






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. 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.






45. 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






46. Percentage of completion and completed contract method allowed.






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






48. Enacted tax rate only.






49. 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.






50. 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.