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






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






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






4. 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.






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






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. 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.






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






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






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






11. Revaluation is not permitted.






12. Lower of cost or market.






13. All gains and losses included in OCI






14. 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






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






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






17. 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.






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






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






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






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






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






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






24. 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






25. 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






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






27. Segment profit or loss - assets.






28. No classification






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






30. Enacted tax rate only.






31. 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.






32. 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.






33. 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






34. 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






35. 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.






36. Cost method or legal (par) method.






37. No impracticality exception for error corrections.






38. 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.






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






40. 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).






41. Enacted tax rate only.






42. 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.






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






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






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






46. 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.






47. 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 : (






48. 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.






49. May not be capitalized.






50. No requirement for explicitly stating following US GAAP.