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. 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.






2. Segment profit or loss - assets.






3. 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.






4. 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).






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






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






7. 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.






8. All gains and losses included in OCI






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






10. 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






11. 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 : (






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






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






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






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






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






17. 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.






18. 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.






19. 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.






20. 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.






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






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






23. 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.






24. Lower of cost or market.






25. 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






26. Percentage of completion and completed contract method allowed.






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. 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.






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






30. 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






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






32. May not be capitalized.






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






34. Slight variation from year-end reporting.






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






36. No classification






37. 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






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






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






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






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






42. Revaluation is not permitted.






43. 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.






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






45. 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.






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






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






48. Enacted tax rate only.






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






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