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






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






4. 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.






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






6. 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






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






8. Revaluation is not permitted.






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






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






12. 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).






13. 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






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






15. Slight variation from year-end reporting.






16. 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






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






18. 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






19. All gains and losses included in OCI






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






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






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






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






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






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






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. 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.






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






29. 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






30. Cost method or legal (par) method.






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






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






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






34. 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.






35. May not be capitalized.






36. 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.






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






38. 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






39. Enacted tax rate only.






40. Lower of cost or market.






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






42. Enacted tax rate only.






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






44. 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






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






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






47. 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 : (






48. 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.






49. 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.






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