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 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.






2. 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.






3. No classification






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






5. No requirement for explicitly stating following US GAAP.






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






7. May not be capitalized.






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. Considered non-compensatory if they meet certain requirements.






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






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






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.






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






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






15. 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.






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






17. 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.






18. 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.






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






20. 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






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






22. Revaluation is not permitted.






23. No impracticality exception for error corrections.






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. Slight variation from year-end reporting.






26. Segment profit or loss - assets.






27. Cost method or legal (par) method.






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


29. 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






30. 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.






31. 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






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






33. 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.






34. 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






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






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






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






38. 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.






39. Enacted tax rate only.






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






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






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






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






44. 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.






45. 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.






46. 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.






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






48. 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






49. All gains and losses included in OCI






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