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. Segment profit or loss - assets.






2. 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 : (






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






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






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






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






7. 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.






8. 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






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






10. Revaluation is not permitted.






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






12. 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.






13. 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).






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






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






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






17. No impracticality exception for error corrections.






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






19. 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






20. 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.






21. 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






22. 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.






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






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






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






26. 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.






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






28. 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.






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






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






31. 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.






32. Percentage of completion and completed contract method allowed.






33. 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.






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


35. No classification






36. 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.






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






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






39. No requirement for explicitly stating following US GAAP.






40. 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






41. All gains and losses included in OCI






42. 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.






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






44. Lower of cost or market.






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






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






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






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






49. Cost method or legal (par) method.






50. Enacted tax rate only.