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. 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.






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






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






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






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






6. No requirement for explicitly stating following US GAAP.






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






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






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






10. 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.






11. 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.






12. Enacted tax rate only.






13. 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.






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






15. 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).






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






17. 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






18. 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






19. 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.






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






21. 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






22. All gains and losses included in OCI






23. 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.






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






25. 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.






26. 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.






27. Revaluation is not permitted.






28. 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






29. No classification






30. No impracticality exception for error corrections.






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






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






33. 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.






34. Enacted tax rate only.






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






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






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






38. Lower of cost or market.






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






40. 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.






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






42. 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.






43. 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.






44. 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






45. 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 : (






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






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






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






49. Percentage of completion and completed contract method allowed.






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