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. 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.






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






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






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






5. 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.






6. Enacted tax rate only.






7. Revaluation is not permitted.






8. Slight variation from year-end reporting.






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






10. 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.






11. Enacted tax rate only.






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






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






14. 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.






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






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






17. 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.






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






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






20. 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






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






22. 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






23. 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






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






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






26. 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.






27. 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.






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






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






30. 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.






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






32. No requirement for explicitly stating following US GAAP.






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






34. 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.






35. 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.






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






37. 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).






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. 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






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






41. No impracticality exception for error corrections.






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






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






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


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






46. All gains and losses included in OCI






47. 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






48. Segment profit or loss - assets.






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






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






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