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. 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






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






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






4. Lower of cost or market.






5. 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.






6. 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






7. 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.






8. 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.






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






10. 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






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. 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






13. Enacted tax rate only.






14. 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






15. No impracticality exception for error corrections.






16. 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.






17. 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.






18. 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.






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






20. May not be capitalized.






21. 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.






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






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






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






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






26. Cost method or legal (par) method.






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






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






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






31. 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.






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






33. 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






34. 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.






35. 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.






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






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


38. Enacted tax rate only.






39. No requirement for explicitly stating following US GAAP.






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






41. All gains and losses included in OCI






42. 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.






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






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






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






46. 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.






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






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






49. Slight variation from year-end reporting.






50. Segment profit or loss - assets.