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. Percentage of completion and completed contract method allowed.






2. 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.






3. 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.






4. 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.






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






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






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






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






9. No impracticality exception for error corrections.






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






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






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






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






14. 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






15. 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.






16. Segment profit or loss - assets.






17. 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






18. Slight variation from year-end reporting.






19. 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






20. 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.






21. 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.






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






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






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






25. Cost method or legal (par) method.






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






27. 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






28. 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.






29. 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.






30. 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.






31. 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).






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






33. 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.






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






35. No requirement for explicitly stating following US GAAP.






36. Enacted tax rate only.






37. 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






38. No classification






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






40. May not be capitalized.






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






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






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






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






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






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






47. Enacted tax rate only.






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






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






50. 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