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






2. 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.






3. 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.






4. May not be capitalized.






5. No classification






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






7. 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






8. 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.






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






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






11. Lower of cost or market.






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






13. Considered non-compensatory if they meet certain requirements.






14. Slight variation from year-end reporting.






15. 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.






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






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






18. 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.






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






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






21. 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






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






23. 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






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






25. 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.






26. 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.






27. No impracticality exception for error corrections.






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. All gains and losses included in OCI






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






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






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






33. 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).






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






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






36. Cost method or legal (par) method.






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


38. 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.






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






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






41. No requirement for explicitly stating following US GAAP.






42. 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.






43. Enacted tax rate only.






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






45. 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 : (






46. Enacted tax rate only.






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






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






49. 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.






50. 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.