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






2. 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






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






4. Enacted tax rate only.






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






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






7. 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.






8. 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).






9. Lower of cost or market.






10. Revaluation is not permitted.






11. Cost method or legal (par) method.






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






13. 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






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






15. Enacted tax rate only.






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






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






18. 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






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






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






21. Segment profit or loss - assets.






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






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






24. No impracticality exception for error corrections.






25. 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.






26. 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.






27. 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.






28. 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.






29. 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.






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






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






32. 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.






33. Slight variation from year-end reporting.






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


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






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






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






38. 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 : (






39. 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






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






41. 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.






42. 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.






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






44. No classification






45. 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.






46. 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






47. 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






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






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






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