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. Lower of cost or market.






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






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






4. 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).






5. 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






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






7. Slight variation from year-end reporting.






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






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






10. Enacted tax rate only.






11. 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.






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






13. Cost method or legal (par) method.






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






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






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






17. 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.






18. 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.






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






20. 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.






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






22. No classification






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






24. 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.






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






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






27. All gains and losses included in OCI






28. No requirement for explicitly stating following US GAAP.






29. 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.






30. 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 : (






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. 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.






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






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






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






36. 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.






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






38. 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






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






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






41. Enacted tax rate only.






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






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






44. Revaluation is not permitted.






45. 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.






46. Percentage of completion and completed contract method allowed.






47. 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






48. 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






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


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