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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. 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.
Construction Contracts
Statement of Cash Flows (Interest and Dividends)
Funded Status of Pension Plan
Accounting for Income Taxes (Valuation)
2. Recognized in a two-step process: (1) recognition of the tax benefit (2) measurement of the tax benefit.
Nonmonetary Exchanges
Uncertain Tax Positions
Diluted EPS
Development Costs (R&D)
3. No separate recognition is given to the conversion feature when convertible bonds are issued. Bonds are recorded in same manner as non-convertible bonds.
Sale-Leaseback Transactions
Treasury Stock
Convertible Bonds
Notes to the Financial Statements
4. 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.
Determining Functional Currency
Disclosure of Financial Instruments
Diluted EPS
Computer and Software Development Costs
5. FASB has not yet issued a pronouncement on convergence with IASB.
Financial Instruments (Initial Recognition)
Interim Financial Reporting Tax Rates
Revenue Recognition
Marketable Securities - Classification
6. 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
Construction Contracts
Variable Interest Entity
Marketable Securities - Available-For-Sale
Goodwill Impairment
7. Classified as: (1) trading (2) available-for-sale (3) held-to-maturity
Marketable Securities - Classification
Contingencies (Probable and Possible Definitions)
Revenue Recognition
Nonmonetary Exchanges
8. Revaluation is not permitted.
Comprehensive Income (Presentation)
Comprehensive Income (Revaluation)
Variable Interest Entity
Funded Status of Pension Plan
9. Bank overdrafts are excluded from cash and classified as financing cash flows.
Disclosure of Financial Instruments
Foreign Currency Translation
Variable Interest Entity
Statement of Cash Flows (Cash)
10. 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.
Fixed Asset Depreciation
Consolidation - Parent and Subsidiary with Different Year-Ends
Pension Plan Cost
Treasury Stock
11. Recorded as an asset and amortized using the straight-line method.
Development Costs (R&D)
Convertible Bonds
Bond Issue Costs
Computer and Software Development Costs
12. 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).
Convertible Bonds
Reporting of Deferred Taxes
Use of Tax Rates
Funded Status of Pension Plan
13. 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
Financial Instruments (Fair Value)
Discontinued Operations
Statement of Changes in Shareholders' Equity
Diluted EPS
14. Entities cannot apply the FASB conceptual framework to specific accounting issues
Subsequent Events
Marketable Securities - Classification
Segment Reporting
Conceptual Framework
15. Slight variation from year-end reporting.
Revenue Recognition
Statement of Cash Flows (Cash)
Interim Financial Reporting
Prior Service Cost
16. 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
Foreign Currency Translation
Related Party Transactions
Statement of Cash Flows (Interest and Dividends)
Impairment of Intangible Assets Other Than Goodwill
17. Valuation allowance is recognized when it is more likely than not that part or all of the deferred tax asset will not be realized.
Fixed Asset Valuation
Statement of Cash Flows (Interest and Dividends)
Accounting for Income Taxes (Valuation)
Statement of Cash Flows (Cash)
18. 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
Pension Plan Liability
Revenue Recognition
Reporting of Pension Cost
Interim Financial Reporting Tax Rates
19. All gains and losses included in OCI
Reporting of Pension Cost
Extraordinary Items
Marketable Securities - Available-For-Sale
Pension Plan Liability
20. Lessees--operating or capital leases. Lessors--operating - sales-type - or direct financing leases.
Nonmonetary Exchanges
Investment Property
Bond Discount/Premium Amortization
Lease Classification
21. Components of net periodic pension cost must be aggregated and presented as one amount on the income statement.
Reporting of Pension Cost
Pension Plan Liability
Accounting for Adjustments in Tax Rates
Diluted EPS
22. Indirect direct costs paid by the lessee are expensed when incurred.
Interim Financial Reporting
Consolidation - Parent and Subsidiary with Different Year-Ends
Notes to the Financial Statements
Indirect Costs of Lease
23. Includes disclosure of significant estimates but not judgments made in preparing the financial statements.
Segment Reporting
Discontinued Operations
Notes to the Financial Statements
Diluted EPS
24. Entities are required to disclose concentrations of credit risk. Market risk disclosures are optional.
Pension Plan Liability
Contingencies (Probable and Possible Definitions)
Revenue Recognition
Disclosure of Financial Instruments
25. Unusual in nature and infrequence in occurrence and material.
Subsequent Events
Extraordinary Items
Goodwill Impairment
Impairment of Intangible Assets Other Than Goodwill
26. 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.
Prior Service Cost
Interim Financial Reporting Tax Rates
Discontinued Operations
Notes to the Financial Statements
27. 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.
Variable Interest Entity
Indirect Costs of Lease
Pension Plan Cost
Marketable Securities - Impairment
28. Asset not required to be remeasures - but does get tested for impairment once classified as held-for-sale
Segment Reporting
Consolidation - Parent and Subsidiary with Different Year-Ends
Discontinued Operations
Comprehensive Income (Revaluation)
29. 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
Contingent Liability
Variable Interest Entity
Notes to the Financial Statements
Segment Reporting
30. Cost method or legal (par) method.
Treasury Stock
Conceptual Framework
Development Costs (R&D)
Statement of Cash Flows (Interest and Dividends)
31. Interest and dividends received - interest paid and taxes paid are CFO. Dividends paid are classified as CFF.
Capital (Finance) Lease Criteria
Variable Interest Entity
Financial Instruments (Initial Recognition)
Statement of Cash Flows (Interest and Dividends)
32. Best method that clearly reflects periodic income. Does not need to have a rational relationship with the physical inventory flow. LFIO is permitted.
Convertible Bonds
Marketable Securities - Available-For-Sale
Statement of Cash Flows (Method)
Inventory Cost Flow Assumptions
33. Remeasurement method must be used when a foreign subsidiary is operating in a highly inflationary environment.
Revenue Recognition
Consolidation - Parent and Subsidiary with Different Year-Ends
Foreign Currency Translation
Intangible Assets
34. 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.
Accounting for Adjustments in Tax Rates
Change in Accounting Entity
Fixed Asset Valuation
Inventory Cost Flow Assumptions
35. May not be capitalized.
Comprehensive Income (Revaluation)
Interim Financial Reporting Tax Rates
Development Costs (R&D)
Pension Plan Cost
36. 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.
Accounting Changes
Lease Classification
Use of Tax Rates
Reporting of Pension Cost
37. Projection benefit obligation (PBO) is the defined benefit pension plan liability.
Disclosure of Financial Instruments
Discontinued Operations
Inventory Cost Flow Assumptions
Pension Plan Liability
38. 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
Subsequent Events
Inventory Cost Flow Assumptions
Statement of Changes in Shareholders' Equity
Marketable Securities - Available-For-Sale
39. Enacted tax rate only.
Segment Reporting
Revenue Recognition
Pension Plan Liability
Interim Financial Reporting Tax Rates
40. Lower of cost or market.
Comprehensive Income (Revaluation)
Inventory Valuation
Financial Instruments (Fair Value)
Diluted EPS
41. No requirement for disclosure of key management compensation arrangements.
Related Party Transactions
Gains and Losses on Pensions
Error Correction
Interim Financial Reporting Requirements
42. Enacted tax rate only.
Use of Tax Rates
Reporting of Pension Cost
Uncertain Tax Positions
Nonmonetary Exchanges
43. Considered non-compensatory if they meet certain requirements.
Capital (Finance) Lease Criteria
Variable Interest Entity
Accounting for Stock Issued to Employees
Change in Accounting Entity
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
Pension Plan Liability
Accounting for Income Taxes (Valuation)
Nonmonetary Exchanges
Related Party Transactions
45. Recognition of gains is dependent on the rights of the leased property retained by the seller-lessee.
Foreign Currency Translation
Capital (Finance) Lease Criteria
Sale-Leaseback Transactions
Bond Discount/Premium Amortization
46. (Balance sheet - income statement - SOCF) as of the most recent fiscal quarter and as of the end of the preceding fiscal year.
Disclosure of Financial Instruments
Statement of Cash Flows (Method)
Risks and Uncertainties
Interim Financial Reporting Requirements
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 : (
Funded Status of Pension Plan
Capital (Finance) Lease Criteria
Contingencies (Probable and Possible Definitions)
Inventory Cost Flow Assumptions
48. 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.
Diluted EPS
Gains and Losses on Pensions
Capital (Finance) Lease Criteria
Comprehensive Income (Revaluation)
49. 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.
Comprehensive Income (Revaluation)
Conceptual Framework
Reporting of Remeasurements
Statement of Cash Flows (Method)
50. Cost model: historical - accum. depr. = impairment
Fixed Asset Valuation
Foreign Currency Translation
Accounting Changes
Interim Financial Reporting