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Test your basic knowledge |
U.S. GAAP
Start Test
Study First
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. No classification
Related Party Transactions
Treasury Stock
Investment Property
Marketable Securities - Available-For-Sale
2. 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.
Lease Classification
Marketable Securities - Available-For-Sale
Comprehensive Income (Presentation)
Uncertain Tax Positions
3. 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.
Inventory Valuation
Convertible Bonds
Consolidation - Parent and Subsidiary with Different Year-Ends
Statement of Cash Flows (Method)
4. Research and development costs expensed - reported using the cost model only.
Goodwill Impairment
Accounting for Adjustments in Tax Rates
Error Correction
Intangible Assets
5. Segment profit or loss - assets.
Disclosure of Financial Instruments
Segment Reporting
Convertible Bonds
Capital (Finance) Lease Criteria
6. 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
Financial Instruments (Fair Value)
Capital (Finance) Lease Criteria
Development Costs (R&D)
Funded Status of Pension Plan
7. Components of net periodic pension cost must be aggregated and presented as one amount on the income statement.
Reporting of Pension Cost
Marketable Securities - Impairment
Error Correction
Capital (Finance) Lease Criteria
8. 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.
Pension Plan Cost
Comprehensive Income (Presentation)
Prior Service Cost
Accounting for Income Taxes (Valuation)
9. Considered non-compensatory if they meet certain requirements.
Funded Status of Pension Plan
Accounting for Stock Issued to Employees
Lease Classification
Development Costs (R&D)
10. Lessees--operating or capital leases. Lessors--operating - sales-type - or direct financing leases.
Pension Plan Cost
Inventory Cost Flow Assumptions
Lease Classification
Use of Tax Rates
11. 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 : (
Indirect Costs of Lease
Comprehensive Income (Revaluation)
Notes to the Financial Statements
Capital (Finance) Lease Criteria
12. 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.
Related Party Transactions
Determining Functional Currency
Conceptual Framework
Financial Instruments (Initial Recognition)
13. Slight variation from year-end reporting.
Fixed Asset Depreciation
Statement of Changes in Shareholders' Equity
Intangible Assets
Interim Financial Reporting
14. Enacted tax rate only.
Interim Financial Reporting Requirements
Discontinued Operations
Interim Financial Reporting Tax Rates
Intangible Assets
15. Interest and dividends received - interest paid and taxes paid are CFO. Dividends paid are classified as CFF.
Funded Status of Pension Plan
Diluted EPS
Statement of Cash Flows (Interest and Dividends)
Financial Instruments (Fair Value)
16. Revaluation is not permitted.
Statement of Changes in Shareholders' Equity
Comprehensive Income (Revaluation)
Reporting of Remeasurements
Marketable Securities - Available-For-Sale
17. Costs before technological feasibility must be expensed - costs after technological feasibility are capitalized.
Computer and Software Development Costs
Extraordinary Items
Investment Property
Development Costs (R&D)
18. Classified as: (1) trading (2) available-for-sale (3) held-to-maturity
Error Correction
Marketable Securities - Classification
Interim Financial Reporting Requirements
Pension Plan Cost
19. All gains and losses included in OCI
Diluted EPS
Foreign Currency Translation
Marketable Securities - Available-For-Sale
Computer and Software Development Costs
20. 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.
Statement of Cash Flows (Method)
Funded Status of Pension Plan
Accounting for Stock Issued to Employees
Statement of Changes in Shareholders' Equity
21. 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.
Inventory Cost Flow Assumptions
Accounting Changes
Segment Reporting
Statement of Cash Flows (Method)
22. May be presented as a primary financial statement or in the notes of the financial statement.
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23. 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
Bond Discount/Premium Amortization
Gains and Losses on Pensions
Related Party Transactions
Subsequent Events
24. Lower of cost or market.
Inventory Valuation
Statement of Cash Flows (Cash)
Sale-Leaseback Transactions
Reporting of Remeasurements
25. 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
Pension Plan Liability
Goodwill Impairment
Financial Instruments (Initial Recognition)
Risks and Uncertainties
26. 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.
Gains and Losses on Pensions
Marketable Securities - Impairment
Use of Tax Rates
Contingencies (Probable and Possible Definitions)
27. Valuation allowance is recognized when it is more likely than not that part or all of the deferred tax asset will not be realized.
Notes to the Financial Statements
Statement of Cash Flows (Interest and Dividends)
Accounting for Income Taxes (Valuation)
Uncertain Tax Positions
28. Remeasurement method must be used when a foreign subsidiary is operating in a highly inflationary environment.
Foreign Currency Translation
Interim Financial Reporting Requirements
Pension Plan Liability
Bond Issue Costs
29. (Balance sheet - income statement - SOCF) as of the most recent fiscal quarter and as of the end of the preceding fiscal year.
Error Correction
Revenue Recognition
Financial Instruments (Fair Value)
Interim Financial Reporting Requirements
30. No separate recognition is given to the conversion feature when convertible bonds are issued. Bonds are recorded in same manner as non-convertible bonds.
Uncertain Tax Positions
Fixed Asset Depreciation
Interim Financial Reporting Tax Rates
Convertible Bonds
31. Projection benefit obligation (PBO) is the defined benefit pension plan liability.
Pension Plan Liability
Capital (Finance) Lease Criteria
Prior Service Cost
Contingent Liability
32. 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.
Interim Financial Reporting Requirements
Reporting of Remeasurements
Comprehensive Income (Presentation)
Impairment of Intangible Assets Other Than Goodwill
33. Indirect direct costs paid by the lessee are expensed when incurred.
Interim Financial Reporting Tax Rates
Marketable Securities - Available-For-Sale
Fixed Asset Depreciation
Indirect Costs of Lease
34. FASB has not yet issued a pronouncement on convergence with IASB.
Financial Instruments (Initial Recognition)
Accounting for Income Taxes (Valuation)
Accounting for Stock Issued to Employees
Uncertain Tax Positions
35. Best method that clearly reflects periodic income. Does not need to have a rational relationship with the physical inventory flow. LFIO is permitted.
Inventory Cost Flow Assumptions
Accounting for Adjustments in Tax Rates
Conceptual Framework
Lease Classification
36. Cost model: historical - accum. depr. = impairment
Change in Accounting Entity
Revenue Recognition
Nonmonetary Exchanges
Fixed Asset Valuation
37. 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).
Interim Financial Reporting Requirements
Statement of Cash Flows (Interest and Dividends)
Reporting of Pension Cost
Reporting of Deferred Taxes
38. 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.
Pension Plan Liability
Change in Accounting Entity
Lease Classification
Accounting for Adjustments in Tax Rates
39. Cost method or legal (par) method.
Statement of Cash Flows (Cash)
Interim Financial Reporting Requirements
Impairment of Intangible Assets Other Than Goodwill
Treasury Stock
40. Recognized in a two-step process: (1) recognition of the tax benefit (2) measurement of the tax benefit.
Impairment of Intangible Assets Other Than Goodwill
Uncertain Tax Positions
Foreign Currency Translation
Subsequent Events
41. Entities cannot apply the FASB conceptual framework to specific accounting issues
Conceptual Framework
Use of Tax Rates
Fixed Asset Valuation
Foreign Currency Translation
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.
Reporting of Deferred Taxes
Indirect Costs of Lease
Marketable Securities - Impairment
Intangible Assets
43. No requirement for explicitly stating following US GAAP.
Uncertain Tax Positions
Consolidation - Parent and Subsidiary with Different Year-Ends
Variable Interest Entity
Notes to the Financial Statements
44. 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
Discontinued Operations
Fixed Asset Valuation
Accounting for Stock Issued to Employees
Impairment of Intangible Assets Other Than Goodwill
45. Recognition of gains is dependent on the rights of the leased property retained by the seller-lessee.
Error Correction
Inventory Valuation
Contingent Liability
Sale-Leaseback Transactions
46. Unusual in nature and infrequence in occurrence and material.
Statement of Cash Flows (Interest and Dividends)
Comprehensive Income (Revaluation)
Discontinued Operations
Extraordinary Items
47. Enacted tax rate only.
Marketable Securities - Impairment
Bond Discount/Premium Amortization
Error Correction
Use of Tax Rates
48. Asset not required to be remeasures - but does get tested for impairment once classified as held-for-sale
Interim Financial Reporting Tax Rates
Discontinued Operations
Variable Interest Entity
Lease Classification
49. All adjustments for changes in deferred tax balances due to changes in tax laws or rates are recognized on the income statement.
Treasury Stock
Accounting for Adjustments in Tax Rates
Prior Service Cost
Pension Plan Liability
50. Includes disclosure of significant estimates but not judgments made in preparing the financial statements.
Variable Interest Entity
Notes to the Financial Statements
Financial Instruments (Fair Value)
Statement of Cash Flows (Method)