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






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






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






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






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






7. Slight variation from year-end reporting.






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






9. 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.






10. 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.






11. 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






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






13. 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.






14. 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.






15. 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 : (






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






17. No classification






18. No impracticality exception for error corrections.






19. Enacted tax rate only.






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






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






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






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






24. 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).






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






26. 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






27. 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.






28. Lower of cost or market.






29. May not be capitalized.






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






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






32. 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






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






34. Cost method or legal (par) method.






35. 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






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






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






38. 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.






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


41. 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.






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






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






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






45. No requirement for explicitly stating following US GAAP.






46. 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.






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






48. Revaluation is not permitted.






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






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