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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. 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.






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






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






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






6. 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.






7. 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






8. 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






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






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






11. 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.






12. 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.






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






14. 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.






15. Lower of cost or market.






16. 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.






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






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






19. May not be capitalized.






20. No classification






21. Percentage of completion and completed contract method allowed.






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






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






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






25. Segment profit or loss - assets.






26. 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






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






28. Enacted tax rate only.






29. 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.






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






31. 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






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






33. No impracticality exception for error corrections.






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. Cost method or legal (par) method.






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






37. Enacted tax rate only.






38. No requirement for explicitly stating following US GAAP.






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


40. 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.






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






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






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






44. Revaluation is not permitted.






45. All gains and losses included in OCI






46. 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






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






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






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






50. 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.






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