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






2. No classification






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






4. 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.






5. 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






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






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. 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.






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






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






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






12. 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.






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






14. No requirement for explicitly stating following US GAAP.






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






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






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






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






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






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






21. Enacted tax rate only.






22. 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.






23. 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.






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






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






26. 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.






27. Revaluation is not permitted.






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






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






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. 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.






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






33. Enacted tax rate only.






34. 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






35. Cost method or legal (par) method.






36. 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






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






38. Slight variation from year-end reporting.






39. 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






40. 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.






41. Segment profit or loss - assets.






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






43. No impracticality exception for error corrections.






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






45. 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






46. 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.






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






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






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






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







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