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. 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.






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






3. Revaluation is not permitted.






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






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


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






7. No requirement for explicitly stating following US GAAP.






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






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






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






11. 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






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






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






14. 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.






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






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






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






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






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






20. 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






21. May not be capitalized.






22. 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






23. Percentage of completion and completed contract method allowed.






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






25. 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.






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






27. 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.






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






29. Segment profit or loss - assets.






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






31. 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.






32. 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.






33. 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.






34. Cost method or legal (par) method.






35. 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






36. All gains and losses included in OCI






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






38. Enacted tax rate only.






39. 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.






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






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






42. 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






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






44. Enacted tax rate only.






45. No impracticality exception for error corrections.






46. 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






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






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. 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.






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.