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






2. 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.






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






4. 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.






5. Percentage of completion and completed contract method allowed.






6. 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.






7. May not be capitalized.






8. 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.






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






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






11. 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.






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






15. 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.






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






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






18. No impracticality exception for error corrections.






19. 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






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






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






22. 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.






23. Slight variation from year-end reporting.






24. No requirement for explicitly stating following US GAAP.






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






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






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






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






29. 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.






30. 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.






31. Lower of cost or market.






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






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






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






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






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






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






38. 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






39. Segment profit or loss - assets.






40. 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






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


42. 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.






43. 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






44. 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.






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






46. 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.






47. Cost method or legal (par) method.






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






49. Enacted tax rate only.






50. 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