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. 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).






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






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






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






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






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






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






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






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






11. Enacted tax rate only.






12. 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






13. 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.






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






15. 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.






16. Revaluation is not permitted.






17. 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






18. Cost method or legal (par) method.






19. All gains and losses included in OCI






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






21. Segment profit or loss - assets.






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






23. 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






24. No impracticality exception for error corrections.






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






26. 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 : (






27. 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






28. 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.






29. Slight variation from year-end reporting.






30. 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






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






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






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

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






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






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






37. 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.






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






39. 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.






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






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






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. 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






45. Enacted tax rate only.






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






47. 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.






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






49. 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.






50. No classification