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. 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.






2. 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.






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






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






5. Cost method or legal (par) method.






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






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

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8. 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.






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






10. 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






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






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






13. Enacted tax rate only.






14. 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.






15. 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






16. Revaluation is not permitted.






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






18. 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






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






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






21. Slight variation from year-end reporting.






22. All gains and losses included in OCI






23. Percentage of completion and completed contract method allowed.






24. 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.






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






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






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






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






29. 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.






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






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






32. No impracticality exception for error corrections.






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






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






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






36. 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.






37. 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






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






39. No classification






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






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






42. 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.






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






44. May not be capitalized.






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






46. Segment profit or loss - assets.






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






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






49. 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






50. 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.