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






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






3. All gains and losses included in OCI






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






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






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






7. 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.






8. 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






9. Enacted tax rate only.






10. 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.






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






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






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






14. 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






15. 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.






16. 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 : (






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






18. Enacted tax rate only.






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






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






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






22. No requirement for explicitly stating following US GAAP.






23. Percentage of completion and completed contract method allowed.






24. 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.






25. 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).






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






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






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






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






30. 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.






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






32. 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.






33. Slight variation from year-end reporting.






34. 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






35. 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.






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






37. Revaluation is not permitted.






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






39. 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






40. Lower of cost or market.






41. 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.






42. 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






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






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






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


46. Effective interest method is required - unless the straight-line method is not materially different from the effective interest method. Amortization is done over the contractual life of the bond.






47. No impracticality exception for error corrections.






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






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






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