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






3. No impracticality exception for error corrections.






4. 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.






5. 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






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






7. No requirement for explicitly stating following US GAAP.






8. May not be capitalized.






9. 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






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






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






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






13. No classification






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






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






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






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






18. Enacted tax rate only.






19. 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






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






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






22. 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.






23. 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).






24. 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.






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






26. All gains and losses included in OCI






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






28. Lower of cost or market.






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






30. 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.






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






32. 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.






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






34. Revaluation is not permitted.






35. 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.






36. 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.






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. Enacted tax rate only.






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






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






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






42. 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.






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






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






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






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






47. Percentage of completion and completed contract method allowed.






48. 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.






49. Slight variation from year-end reporting.






50. 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