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






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






4. 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.






5. 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.






6. 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.






7. Slight variation from year-end reporting.






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






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






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






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






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






13. 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.






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






15. Cost method or legal (par) method.






16. Enacted tax rate only.






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






18. No impracticality exception for error corrections.






19. Lower of cost or market.






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






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


22. Percentage of completion and completed contract method allowed.






23. 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.






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






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






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. 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 : (






28. Revaluation is not permitted.






29. No requirement for explicitly stating following US GAAP.






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






31. All gains and losses included in OCI






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






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






34. 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.






35. 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.






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






37. 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.






38. 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.






39. May not be capitalized.






40. 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.






41. 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






42. 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.






43. Segment profit or loss - assets.






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






45. 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






46. 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






47. 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






48. 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






49. 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).






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