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






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






3. 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.






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






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






6. 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






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






8. No impracticality exception for error corrections.






9. 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.






10. Slight variation from year-end reporting.






11. Revaluation is not permitted.






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






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






14. 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.






15. Enacted tax rate only.






16. 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






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






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






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






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






21. Lower of cost or market.






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






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






24. 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






25. 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.






26. Cost method or legal (par) method.






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






28. Segment profit or loss - assets.






29. Enacted tax rate only.






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






31. 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.






32. 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.






33. 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.






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






35. 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.






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






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






38. 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.






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






40. 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 : (






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






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






43. No requirement for explicitly stating following US GAAP.






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


45. All gains and losses included in OCI






46. 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.






47. 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






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






49. 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).






50. 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.