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. Slight variation from year-end reporting.






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






3. Enacted tax rate only.






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






5. 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.






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






7. Enacted tax rate only.






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






9. 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






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






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






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






13. 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.






14. 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






15. 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






16. May not be capitalized.






17. 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






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






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






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






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






22. 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.






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






24. 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.






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






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






27. 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 : (






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






29. 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.






30. 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






31. All gains and losses included in OCI






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






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


34. 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






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






36. Cost method or legal (par) method.






37. Lower of cost or market.






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






39. 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.






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






41. Percentage of completion and completed contract method allowed.






42. Revaluation is not permitted.






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






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






45. 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.






46. 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.






47. 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.






48. No requirement for explicitly stating following US GAAP.






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. 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.