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






2. No classification






3. 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.






4. 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






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






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






7. 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.






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






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






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






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






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

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13. All gains and losses included in OCI






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






15. 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.






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






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






19. 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






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






21. Segment profit or loss - assets.






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






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






24. 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.






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






26. Enacted tax rate only.






27. No requirement for explicitly stating following US GAAP.






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






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






30. 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.






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






32. 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






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






34. May not be capitalized.






35. Lower of cost or market.






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






37. No impracticality exception for error corrections.






38. 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.






39. 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






40. 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.






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






42. 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.






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






44. 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






45. Slight variation from year-end reporting.






46. 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.






47. 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.






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






49. Cost method or legal (par) method.






50. Enacted tax rate only.