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






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






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






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






5. 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.






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






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. 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






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






10. 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






11. Enacted tax rate only.






12. Cost method or legal (par) method.






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






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-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.






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






17. No impracticality exception for error corrections.






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






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






20. No requirement for explicitly stating following US GAAP.






21. Segment profit or loss - assets.






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






23. 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.






24. Percentage of completion and completed contract method allowed.






25. 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.






26. No classification






27. 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.






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






29. 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 : (






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






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






33. Revaluation is not permitted.






34. 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.






35. 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.






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






38. 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






39. 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.






40. 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






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






42. Slight variation from year-end reporting.






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






44. Enacted tax rate only.






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






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


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






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






49. 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.






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