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






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






3. 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.






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






5. 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






6. 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






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






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






9. 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






10. 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.






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






12. 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.






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






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






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






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






17. No requirement for explicitly stating following US GAAP.






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






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






20. 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






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






22. May not be capitalized.






23. 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






24. 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 : (






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






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

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27. All gains and losses included in OCI






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






29. 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






30. 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.






31. 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.






32. No classification






33. 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.






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






35. Lower of cost or market.






36. Cost method or legal (par) method.






37. Enacted tax rate only.






38. Revaluation is not permitted.






39. Slight variation from year-end reporting.






40. 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.






41. 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.






42. Percentage of completion and completed contract method allowed.






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






44. 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.






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






46. 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






47. No impracticality exception for error corrections.






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






49. 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.






50. 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.