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. 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






2. 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






3. 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






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






5. 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.






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






7. 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






8. Segment profit or loss - assets.






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






10. Revaluation is not permitted.






11. 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.






12. Enacted tax rate only.






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






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






15. 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.






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






17. May not be capitalized.






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






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






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






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






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






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


24. 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.






25. No classification






26. 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






27. 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.






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






29. Slight variation from year-end reporting.






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






31. Lower of cost or market.






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






33. 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.






34. 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 : (






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






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






37. No requirement for explicitly stating following US GAAP.






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. 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.






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






41. Percentage of completion and completed contract method allowed.






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






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






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






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






46. 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.






47. 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.






48. 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






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






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