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






2. 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






3. 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).






4. 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






5. 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.






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






7. May not be capitalized.






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






9. Cost method or legal (par) method.






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






11. 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






12. No impracticality exception for error corrections.






13. 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






14. Enacted tax rate only.






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






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






17. 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.






18. Entities have two choices when accounting for gains and losses: (1) recognize on the income statement in period incurred (2) recognize in OCI in the period incurred and then amortize to pension expense using the corridor approach.






19. 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.






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






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






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






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


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






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






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






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






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






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






30. 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.






31. 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.






32. 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






33. 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.






34. All gains and losses included in OCI






35. 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.






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






37. 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.






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






39. Segment profit or loss - assets.






40. 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.






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






42. No requirement for explicitly stating following US GAAP.






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






44. 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






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






46. Lower of cost or market.






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






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






49. 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.






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