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. Revaluation is not permitted.






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. Cost method or legal (par) method.






4. 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






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






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






7. 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.






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






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






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






11. Enacted tax rate only.






12. Enacted tax rate only.






13. May not be capitalized.






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






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






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






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






18. No impracticality exception for error corrections.






19. 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.






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






21. 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.






22. 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.






23. 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.






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. No requirement for disclosure of key management compensation arrangements.






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. 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.






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






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






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






31. 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






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






33. 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






34. Percentage of completion and completed contract method allowed.






35. 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.






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






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






38. Segment profit or loss - assets.






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






40. 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.






41. 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






42. 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.






43. No requirement for explicitly stating following US GAAP.






44. Lower of cost or market.






45. 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.






46. 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 : (






47. All gains and losses included in OCI






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






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






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







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