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. 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






2. 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).






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






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






5. No requirement for explicitly stating following US GAAP.






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. 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.






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






9. 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






10. All gains and losses included in OCI






11. No classification






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






13. No impracticality exception for error corrections.






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






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






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






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


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






19. 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.






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






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. Cost method or legal (par) method.






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






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






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






27. 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.






28. 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.






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






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






31. Slight variation from year-end reporting.






32. 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.






33. Segment profit or loss - assets.






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






35. 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.






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






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






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






39. May not be capitalized.






40. Revaluation is not permitted.






41. 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 : (






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






43. 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.






44. Percentage of completion and completed contract method allowed.






45. 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






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






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






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






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






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