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. 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.






2. Lower of cost or market.






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






4. 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.






5. Cost method or legal (par) method.






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






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






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






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






10. 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.






11. 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.






12. 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.






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






14. 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.






15. 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.






16. 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






17. 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 : (






18. Enacted tax rate only.






19. Percentage of completion and completed contract method allowed.






20. No classification






21. 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.






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






23. 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.






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






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






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






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






28. 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.






29. No requirement for explicitly stating following US GAAP.






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






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






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






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






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






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






36. Revaluation is not permitted.






37. 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






38. 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.






39. No impracticality exception for error corrections.






40. 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






41. 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






42. 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).






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






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






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






46. 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






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






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






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






50. All gains and losses included in OCI