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






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






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. Considered non-compensatory if they meet certain requirements.






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






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






7. 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.






8. 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.






9. Segment profit or loss - assets.






10. 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






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






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






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






14. Revaluation is not permitted.






15. 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






16. 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.






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






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






19. 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 : (






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






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






22. No impracticality exception for error corrections.






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






24. 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






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






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






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






28. Slight variation from year-end reporting.






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






30. 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






31. Percentage of completion and completed contract method allowed.






32. No requirement for explicitly stating following US GAAP.






33. 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.






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






35. 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






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






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






38. All gains and losses included in OCI






39. 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.






40. Enacted tax rate only.






41. 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.






42. 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).






43. Enacted tax rate only.






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






45. Cost method or legal (par) method.






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






47. 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.






48. 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






49. 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.






50. 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.