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. All gains and losses included in OCI






2. 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.






3. 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






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






5. Impairment losses recognized in income statement and cost basis is reduced. If held-to-maturity - subsequent changes are not recognized. If available-for-sale - subsequent income is included in OCI.






6. 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






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






8. 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 : (






9. 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.






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






11. Revaluation is not permitted.






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






13. 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.






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






15. 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






16. 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






17. 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






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






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






20. 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.






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






22. 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.






23. 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.






24. Segment profit or loss - assets.






25. Lower of cost or market.






26. Cost method or legal (par) method.






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






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






29. 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






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






31. 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.






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






33. Enacted tax rate only.






34. No classification






35. 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.






36. 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.






37. 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.






38. Percentage of completion and completed contract method allowed.






39. No impracticality exception for error corrections.






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


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






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






43. May not be capitalized.






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






45. No requirement for explicitly stating following US GAAP.






46. Slight variation from year-end reporting.






47. 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).






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






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






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