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






2. 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.






3. 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






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






5. No impracticality exception for error corrections.






6. 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.






7. 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.






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






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






10. Enacted tax rate only.






11. No requirement for explicitly stating following US GAAP.






12. 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






13. 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.






14. No classification






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






16. Lower of cost or market.






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






18. Percentage of completion and completed contract method allowed.






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






20. 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.






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






22. 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.






23. Revaluation is not permitted.






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






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






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


27. 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.






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






29. 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.






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






31. 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.






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






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






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






35. Enacted tax rate only.






36. 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.






37. Cost method or legal (par) method.






38. 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.






39. 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.






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






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






42. May not be capitalized.






43. 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).






44. 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






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






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






47. Segment profit or loss - assets.






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






49. 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






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