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. 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.






3. All gains and losses included in OCI






4. Enacted tax rate only.






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






6. Revaluation is not permitted.






7. 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






8. 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.






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






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






11. 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






12. May not be capitalized.






13. 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 : (






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

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15. 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.






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






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






18. 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.






19. 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.






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






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






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






23. 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.






24. Percentage of completion and completed contract method allowed.






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






26. 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.






27. Enacted tax rate only.






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






29. Cost method or legal (par) method.






30. No requirement for explicitly stating following US GAAP.






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






32. 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.






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






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






35. 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.






36. No impracticality exception for error corrections.






37. 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






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






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






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






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






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






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






44. Slight variation from year-end reporting.






45. 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.






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






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






48. 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.






49. Lower of cost or market.






50. Segment profit or loss - assets.







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