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. 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.






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






3. 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).






4. Revaluation is not permitted.






5. Cost method or legal (par) method.






6. 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






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






8. 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.






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






10. 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.






11. 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.






12. May not be capitalized.






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






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






15. 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.






16. Slight variation from year-end reporting.






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






18. 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.






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






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






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






22. 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






23. 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






24. Percentage of completion and completed contract method allowed.






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






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






27. 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.






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






29. No requirement for explicitly stating following US GAAP.






30. 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.






31. 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






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






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






34. Enacted tax rate only.






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






36. 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.






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






38. Enacted tax rate only.






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






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






41. 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.






42. 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.






43. 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.






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






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






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


47. No impracticality exception for error corrections.






48. 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






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






50. No classification






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