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. 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.






2. No requirement for explicitly stating following US GAAP.






3. 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.






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






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






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






7. All gains and losses included in OCI






8. 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.






9. 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.






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






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






12. 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.






13. 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.






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






15. 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.






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






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






18. Revaluation is not permitted.






19. Enacted tax rate only.






20. 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






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






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






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. Unusual in nature and infrequence in occurrence and material.






25. Segment profit or loss - assets.






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. Slight variation from year-end reporting.






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






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






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






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


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






33. 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






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






35. 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.






36. No classification






37. Percentage of completion and completed contract method allowed.






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






39. 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 : (






40. Cost method or legal (par) method.






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






42. 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






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






44. 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






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






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






48. May not be capitalized.






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






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