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






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






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






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






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






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






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






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. 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






11. 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.






12. 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.






13. Percentage of completion and completed contract method allowed.






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






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






16. 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






17. Segment profit or loss - assets.






18. 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






19. 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.






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






21. Enacted tax rate only.






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






23. No requirement for explicitly stating following US GAAP.






24. 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.






25. 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






26. No impracticality exception for error corrections.






27. 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.






28. 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.






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






30. Enacted tax rate only.






31. Revaluation is not permitted.






32. 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).






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






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






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






36. 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.






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






38. 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.






39. Cost method or legal (par) method.






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






41. 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






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






43. 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






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






45. 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 : (






46. 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.






47. All gains and losses included in OCI






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






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






50. 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.