Test your basic knowledge |

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. Recognized in a two-step process: (1) recognition of the tax benefit (2) measurement of the tax benefit.






2. 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






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

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






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. 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.






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






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. 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. 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).






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






12. 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.






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






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






15. 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






16. No requirement for explicitly stating following US GAAP.






17. 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.






18. 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.






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






20. No classification






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






22. Cost method or legal (par) method.






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






24. Lower of cost or market.






25. 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.






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






27. Percentage of completion and completed contract method allowed.






28. 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






29. 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






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






31. 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.






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






33. Enacted tax rate only.






34. 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.






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. Segment profit or loss - assets.






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






38. 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.






39. 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






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






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






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






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






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






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






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






47. No impracticality exception for error corrections.






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






49. 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






50. 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







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