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. 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.






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






3. 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






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






5. Lower of cost or market.






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






7. 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






8. Slight variation from year-end reporting.






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






10. 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.






11. 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 : (






12. 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.






13. 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.






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






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






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






17. 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






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






19. Cost method or legal (par) method.






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






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






22. Enacted tax rate only.






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






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






25. 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.






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






27. 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.






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






29. 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






30. 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.






31. No requirement for explicitly stating following US GAAP.






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






33. Percentage of completion and completed contract method allowed.






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






35. 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.






36. No impracticality exception for error corrections.






37. 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






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






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






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






41. 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.






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


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






45. No classification






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






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






48. 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.






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






50. 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.