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






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






3. Revaluation is not permitted.






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






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






6. 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.






7. 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.






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






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






10. Cost method or legal (par) method.






11. 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.






12. No impracticality exception for error corrections.






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






14. May not be capitalized.






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






16. Percentage of completion and completed contract method allowed.






17. 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.






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






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


20. Segment profit or loss - assets.






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






22. 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






23. 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.






24. 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.






25. 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.






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






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






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






29. 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






30. 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.






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






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






33. 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).






34. Enacted tax rate only.






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






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






38. 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.






39. 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






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






41. Enacted tax rate only.






42. No classification






43. 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






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






45. 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.






46. Lower of cost or market.






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






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






49. 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.






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