Test your basic knowledge |

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. Interest and dividends received - interest paid and taxes paid are CFO. Dividends paid are classified as CFF.






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






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






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






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

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






8. 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






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






10. No classification






11. 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






12. 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






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






14. 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.






15. 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.






16. 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






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






18. 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.






19. Segment profit or loss - assets.






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






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






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






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. Revaluation is not permitted.






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






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






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






28. 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.






29. 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.






30. Enacted tax rate only.






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






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






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






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






35. 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.






36. Lower of cost or market.






37. 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.






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






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






40. 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.






41. Percentage of completion and completed contract method allowed.






42. 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






43. May not be capitalized.






44. 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 : (






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






46. Cost method or legal (par) method.






47. 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






48. 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.






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. 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.







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