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. Percentage of completion and completed contract method allowed.






2. 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.






3. Segment profit or loss - assets.






4. 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






5. 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.






6. 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






7. No classification






8. 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.






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






10. 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 : (






11. 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






12. Cost method or legal (par) method.






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






14. 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.






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






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






17. 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.






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






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






20. 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.






21. Lower of cost or market.






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






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






24. No impracticality exception for error corrections.






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






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






27. 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






28. 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.






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






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. Revaluation is not permitted.






32. Enacted tax rate only.






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






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






35. 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.






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






37. 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.






38. 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.






39. 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.






40. May not be capitalized.






41. 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.






42. Enacted tax rate only.






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






44. All gains and losses included in OCI






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


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






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






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






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






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