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. Lower of cost or market.






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






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






4. 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.






5. Enacted tax rate only.






6. 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.






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






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






9. 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.






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


11. 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






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






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






14. 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.






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






16. 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.






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






18. 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.






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. No requirement for explicitly stating following US GAAP.






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






22. 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.






23. Slight variation from year-end reporting.






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






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






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






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






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






29. No impracticality exception for error corrections.






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






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






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






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






34. 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






35. 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






36. 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.






37. 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






38. 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






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






40. No classification






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






42. Cost method or legal (par) method.






43. 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.






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






45. 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).






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






47. 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 : (






48. May not be capitalized.






49. Segment profit or loss - assets.






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