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. No requirement for explicitly stating following US GAAP.






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






3. Slight variation from year-end reporting.






4. Percentage of completion and completed contract method allowed.






5. 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 : (






6. 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.






7. 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






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






9. 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.






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






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






12. 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.






13. 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.






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






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






16. 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.






17. 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.






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






19. 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.






20. 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.






21. Cost method or legal (par) method.






22. 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.






23. 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






24. Lower of cost or market.






25. No impracticality exception for error corrections.






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






27. Enacted tax rate only.






28. 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.






29. 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






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






31. 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






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






33. 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






34. May not be capitalized.






35. Segment profit or loss - assets.






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






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






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






39. 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.






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






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






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






43. 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).






44. Enacted tax rate only.






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






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






47. 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.






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






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






50. 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