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






2. 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.






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






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






5. All gains and losses included in OCI






6. 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.






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






8. No requirement for explicitly stating following US GAAP.






9. 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.






10. 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.






11. 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.






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






13. 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






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






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






16. Lower of cost or market.






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






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






19. Percentage of completion and completed contract method allowed.






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






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






22. 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.






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






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






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






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






27. 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






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






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






30. Slight variation from year-end reporting.






31. 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






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






33. No classification






34. 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.






35. 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






36. Revaluation is not permitted.






37. May not be capitalized.






38. 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).






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






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






41. 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.






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






43. Segment profit or loss - assets.






44. No impracticality exception for error corrections.






45. Enacted tax rate only.






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






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






48. Enacted tax rate only.






49. 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.






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