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Test your basic knowledge |
U.S. GAAP
Start Test
Study First
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. Slight variation from year-end reporting.
Financial Instruments (Fair Value)
Inventory Valuation
Nonmonetary Exchanges
Interim Financial Reporting
2. 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
Impairment of Intangible Assets Other Than Goodwill
Uncertain Tax Positions
Marketable Securities - Available-For-Sale
Reporting of Pension Cost
3. 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.
Variable Interest Entity
Determining Functional Currency
Statement of Changes in Shareholders' Equity
Diluted EPS
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.
Treasury Stock
Change in Accounting Entity
Risks and Uncertainties
Consolidation - Parent and Subsidiary with Different Year-Ends
5. Includes disclosure of significant estimates but not judgments made in preparing the financial statements.
Notes to the Financial Statements
Extraordinary Items
Capital (Finance) Lease Criteria
Development Costs (R&D)
6. FASB has not yet issued a pronouncement on convergence with IASB.
Accounting for Adjustments in Tax Rates
Financial Instruments (Initial Recognition)
Statement of Cash Flows (Method)
Comprehensive Income (Presentation)
7. Research and development costs expensed - reported using the cost model only.
Marketable Securities - Classification
Reporting of Deferred Taxes
Intangible Assets
Risks and Uncertainties
8. No impracticality exception for error corrections.
Fixed Asset Impairment
Change in Accounting Entity
Error Correction
Reporting of Pension Cost
9. Percentage of completion and completed contract method allowed.
Disclosure of Financial Instruments
Marketable Securities - Available-For-Sale
Construction Contracts
Use of Tax Rates
10. Enacted tax rate only.
Marketable Securities - Impairment
Bond Discount/Premium Amortization
Variable Interest Entity
Interim Financial Reporting Tax Rates
11. 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.
Contingencies (Probable and Possible Definitions)
Reporting of Remeasurements
Uncertain Tax Positions
Change in Accounting Entity
12. Remeasurement method must be used when a foreign subsidiary is operating in a highly inflationary environment.
Consolidation - Parent and Subsidiary with Different Year-Ends
Accounting for Adjustments in Tax Rates
Convertible Bonds
Foreign Currency Translation
13. 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
Extraordinary Items
Related Party Transactions
Contingent Liability
Notes to the Financial Statements
14. May not be capitalized.
Prior Service Cost
Uncertain Tax Positions
Development Costs (R&D)
Notes to the Financial Statements
15. Revaluation is not permitted.
Capital (Finance) Lease Criteria
Comprehensive Income (Revaluation)
Accounting for Income Taxes (Valuation)
Consolidation - Parent and Subsidiary with Different Year-Ends
16. Cost model: historical - accum. depr. = impairment
Determining Functional Currency
Fixed Asset Valuation
Statement of Cash Flows (Method)
Interim Financial Reporting Requirements
17. Lessees--operating or capital leases. Lessors--operating - sales-type - or direct financing leases.
Accounting Changes
Contingent Liability
Lease Classification
Conceptual Framework
18. Interest and dividends received - interest paid and taxes paid are CFO. Dividends paid are classified as CFF.
Statement of Cash Flows (Interest and Dividends)
Diluted EPS
Bond Issue Costs
Fixed Asset Valuation
19. Bank overdrafts are excluded from cash and classified as financing cash flows.
Statement of Cash Flows (Cash)
Notes to the Financial Statements
Statement of Cash Flows (Interest and Dividends)
Consolidation - Parent and Subsidiary with Different Year-Ends
20. 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.
Sale-Leaseback Transactions
Pension Plan Cost
Marketable Securities - Impairment
Treasury Stock
21. Entities are required to disclose concentrations of credit risk. Market risk disclosures are optional.
Revenue Recognition
Extraordinary Items
Disclosure of Financial Instruments
Foreign Currency Translation
22. 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 : (
Capital (Finance) Lease Criteria
Extraordinary Items
Reporting of Remeasurements
Consolidation - Parent and Subsidiary with Different Year-Ends
23. Components of net periodic pension cost must be aggregated and presented as one amount on the income statement.
Comprehensive Income (Revaluation)
Reporting of Pension Cost
Nonmonetary Exchanges
Discontinued Operations
24. 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.
Funded Status of Pension Plan
Interim Financial Reporting Tax Rates
Use of Tax Rates
Diluted EPS
25. Projection benefit obligation (PBO) is the defined benefit pension plan liability.
Pension Plan Liability
Uncertain Tax Positions
Diluted EPS
Reporting of Pension Cost
26. 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.
Disclosure of Financial Instruments
Computer and Software Development Costs
Statement of Changes in Shareholders' Equity
Bond Discount/Premium Amortization
27. Segment profit or loss - assets.
Interim Financial Reporting Requirements
Segment Reporting
Related Party Transactions
Fixed Asset Valuation
28. When the direct method is used - entities are required to present a reconciliation of net income to net cash flows from operating activities.
Error Correction
Financial Instruments (Initial Recognition)
Determining Functional Currency
Statement of Cash Flows (Method)
29. Recorded as an asset and amortized using the straight-line method.
Fixed Asset Impairment
Fixed Asset Valuation
Bond Issue Costs
Comprehensive Income (Presentation)
30. (Balance sheet - income statement - SOCF) as of the most recent fiscal quarter and as of the end of the preceding fiscal year.
Interim Financial Reporting Requirements
Prior Service Cost
Funded Status of Pension Plan
Construction Contracts
31. 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
Fixed Asset Valuation
Notes to the Financial Statements
Financial Instruments (Fair Value)
Revenue Recognition
32. 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.
Interim Financial Reporting Requirements
Financial Instruments (Initial Recognition)
Gains and Losses on Pensions
Reporting of Deferred Taxes
33. No separate recognition is given to the conversion feature when convertible bonds are issued. Bonds are recorded in same manner as non-convertible bonds.
Use of Tax Rates
Change in Accounting Entity
Reporting of Deferred Taxes
Convertible Bonds
34. Costs before technological feasibility must be expensed - costs after technological feasibility are capitalized.
Segment Reporting
Computer and Software Development Costs
Intangible Assets
Fixed Asset Depreciation
35. Considered non-compensatory if they meet certain requirements.
Accounting for Stock Issued to Employees
Inventory Cost Flow Assumptions
Related Party Transactions
Comprehensive Income (Revaluation)
36. 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).
Reporting of Deferred Taxes
Marketable Securities - Impairment
Marketable Securities - Classification
Determining Functional Currency
37. 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
Determining Functional Currency
Fixed Asset Impairment
Variable Interest Entity
Accounting for Stock Issued to Employees
38. 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.
Development Costs (R&D)
Accounting Changes
Fixed Asset Valuation
Diluted EPS
39. 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.
Prior Service Cost
Lease Classification
Fixed Asset Impairment
Development Costs (R&D)
40. Recognized in a two-step process: (1) recognition of the tax benefit (2) measurement of the tax benefit.
Uncertain Tax Positions
Pension Plan Cost
Goodwill Impairment
Fixed Asset Depreciation
41. 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.
Gains and Losses on Pensions
Accounting for Income Taxes (Valuation)
Diluted EPS
Subsequent Events
42. May be presented as a primary financial statement or in the notes of the financial statement.
43. 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
Statement of Changes in Shareholders' Equity
Statement of Cash Flows (Interest and Dividends)
Goodwill Impairment
Investment Property
44. Classified as: (1) trading (2) available-for-sale (3) held-to-maturity
Fixed Asset Depreciation
Pension Plan Cost
Marketable Securities - Classification
Interim Financial Reporting Tax Rates
45. Cost method or legal (par) method.
Related Party Transactions
Capital (Finance) Lease Criteria
Variable Interest Entity
Treasury Stock
46. 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.
Segment Reporting
Diluted EPS
Development Costs (R&D)
Prior Service Cost
47. 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
Revenue Recognition
Nonmonetary Exchanges
Fixed Asset Impairment
Diluted EPS
48. 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.
Comprehensive Income (Presentation)
Statement of Cash Flows (Cash)
Convertible Bonds
Revenue Recognition
49. Asset not required to be remeasures - but does get tested for impairment once classified as held-for-sale
Construction Contracts
Intangible Assets
Discontinued Operations
Lease Classification
50. No classification
Fixed Asset Depreciation
Contingent Liability
Change in Accounting Entity
Investment Property