Question 1

What is the appropriate treatment in an interim financial report for a LIFO liquidation?

Accepted Answer

A)  The LIFO liquidation is always ignored for interim reporting. 
B)  The LIFO liquidation should always be reflected in gross profit on an interim income statement. 
C)  The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim balance sheet and the interim income statement. 
D)  The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim income statement but not the interim balance sheet. 
E)  The LIFO liquidation should only be reflected in gross profit on an interim income statement if it is determined that it will not be replaced by year-end. 
A)  The LIFO liquidation is always ignored for interim reporting. 
B)  The LIFO liquidation should always be reflected in gross profit on an interim income statement. 
C)  The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim balance sheet and the interim income statement. 
D)  The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim income statement but not the interim balance sheet. 
E)  The LIFO liquidation should only be reflected in gross profit on an interim income statement if it is determined that it will not be replaced by year-end.

Question 2

How should a change from one generally accepted accounting principle to another accepted principle be handled in a third-quarter income statement?

Accepted Answer

A)  Retrospectively restate the first-quarter income statement, net of income taxes, as though the change occurred at the beginning of the year. 
B)  Postpone recording of the change to the annual income statement. 
C)  Record the change in the third-quarter income statement, net of income taxes. 
D)  Adjust financial statements for each prior period presented to reflect the effects of the new principle in those reported periods. 
E)  These changes are prohibited by GAAP. 
A)  Retrospectively restate the first-quarter income statement, net of income taxes, as though the change occurred at the beginning of the year. 
B)  Postpone recording of the change to the annual income statement. 
C)  Record the change in the third-quarter income statement, net of income taxes. 
D)  Adjust financial statements for each prior period presented to reflect the effects of the new principle in those reported periods. 
E)  These changes are prohibited by GAAP.

Question 3

Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2021. Baker has an effective income tax rate of 35% and 100,000 shares of common stock issued and outstanding. The following additional information is available:   Assuming Baker makes the change in the first quarter of 2020, how much is reported as net income for the first quarter of 2020?

Accepted Answer

A)  $300,000. 
B)  $322,750. 
C)  $335,000. 
D)  $265,000. 
E)  $277,250. 
A)  $300,000. 
B)  $322,750. 
C)  $335,000. 
D)  $265,000. 
E)  $277,250.

Question 4

Priestly Corporation's revenues for the year ended December 31, 2020, were as follows:Consolidated Revenue per the Income Statement: $1,400,000Division 1 Intersegment Sales: $200,000Division 2 Intersegment Sales: $80,000For purposes of the Revenue Test, what amount will be used as the benchmark for determining whether a segment is reportable?

Accepted Answer

A)  $140,000. 
B)  $148,000. 
C)  $160,000. 
D)  $168,000. 
E)  $0. 
A)  $140,000. 
B)  $148,000. 
C)  $160,000. 
D)  $168,000. 
E)  $0.

Question 5

Wayne, Inc. has four operating segments with the following information:   What is the minimum amount of assets an operating segment must have to be considered a reportable segment?

Accepted Answer

A)  $4,080,000. 
B)  $2,430,600. 
C)  $1,293,000. 
D)  $4,430,000. 
E)  $1,355,200. 
A)  $4,080,000. 
B)  $2,430,600. 
C)  $1,293,000. 
D)  $4,430,000. 
E)  $1,355,200.

Question 6

The following information for Urbanski Corporation relates to the three months ending June 30, 2021:   Urbanski uses the LIFO method to account for inventory, and expects at least 15,000 units to be on hand in the ending inventory at year-end. Purchases made in the last six months are expected to cost an average of $18 per unit.Compute cost of goods sold and gross profit for the quarter ending June 30, 2021.

Accepted Answer

Determination of Cos

Question 7

Which of the following is a criterion for determining whether an operating segment is separately reportable?

Accepted Answer

A)  An operating segment's assets are 10 percent or more of combined segment assets. 
B)  An operating segment's assets are 10 percent or more of consolidated assets. 
C)  An operating segment's assets are 10 percent or more of combined segment liabilities. 
D)  An operating segment's assets are 10 percent or more of consolidated liabilities. 
E)  An operating segment's assets are 10 percent or more of corporate assets. 
A)  An operating segment's assets are 10 percent or more of combined segment assets. 
B)  An operating segment's assets are 10 percent or more of consolidated assets. 
C)  An operating segment's assets are 10 percent or more of combined segment liabilities. 
D)  An operating segment's assets are 10 percent or more of consolidated liabilities. 
E)  An operating segment's assets are 10 percent or more of corporate assets.

Question 8

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands):   In applying the asset test, what is the minimum amount an operating segment must have in order to meet the asset test for a reportable segment?

Accepted Answer

A)  $12.5. 
B)  $15.2. 
C)  $17.2. 
D)  $18.4. 
E)  $19.8. 
A)  $12.5. 
B)  $15.2. 
C)  $17.2. 
D)  $18.4. 
E)  $19.8.

Question 9

What are the two approaches that can be followed in preparing interim reports?

Accepted Answer

A)  Indiscrete and terminal. 
B)  Discrete and terminal. 
C)  Metric and integral. 
D)  Discrete and integral. 
E)  Discrete and metric. 
A)  Indiscrete and terminal. 
B)  Discrete and terminal. 
C)  Metric and integral. 
D)  Discrete and integral. 
E)  Discrete and metric.

Question 10

What two disclosure guidelines for operating segment information are designed to ensure the consistency of data reported from year to year?

Accepted Answer

1) If an operating segment does not pass

Question 11

Whitley Corporation identified four operating segments: Automotive, Electrical, Lawn Equipment, and Sporting Goods. Automotive met the revenue test and the profit or loss test. Electrical met all three tests. Lawn Equipment met only the asset test. Sporting Goods did not meet any of the three tests. Which of these segments must be disclosed separately?

Accepted Answer

A)  Option A. 
B)  Option B. 
C)  Option C. 
D)  Option D. 
E)  Option E. 
A)  Option A. 
B)  Option B. 
C)  Option C. 
D)  Option D. 
E)  Option E.

Question 12

Elektronix, Inc. has three operating segments with the following information:   What is the minimum amount of revenue an operating segment must have to be considered a reportable segment?

Accepted Answer

A)  $650,000. 
B)  $660,000. 
C)  $670,000. 
D)  $680,000. 
E)  $690,000. 
A)  $650,000. 
B)  $660,000. 
C)  $670,000. 
D)  $680,000. 
E)  $690,000.

Question 13

Which of the following operating segment disclosures is not required by U.S. GAAP?

Accepted Answer

A)  Interest expense. 
B)  Intersegment sales. 
C)  Unusual items. 
D)  Depletion. 
E)  Liabilities. 
A)  Interest expense. 
B)  Intersegment sales. 
C)  Unusual items. 
D)  Depletion. 
E)  Liabilities.

Question 14

Which of the following statements is true according to U.S. GAAP regarding operating segment disclosure?

Accepted Answer

A)  The measurement of segment profit and loss disclosure need not be similar to the measurement provided to the chief operating decision maker. 
B)  Segment information does not have to be in accordance with generally accepted accounting principles. 
C)  Disclosure of a major customer's identity is required. 
D)  Geographic area information must be disclosed in interim financial statements. 
E)  Immaterial items must be disclosed. 
A)  The measurement of segment profit and loss disclosure need not be similar to the measurement provided to the chief operating decision maker. 
B)  Segment information does not have to be in accordance with generally accepted accounting principles. 
C)  Disclosure of a major customer's identity is required. 
D)  Geographic area information must be disclosed in interim financial statements. 
E)  Immaterial items must be disclosed.

Question 15

Provo, Inc. has an estimated annual tax rate of 35% in the first quarter of 2021. Pretax income for the first quarter was $300,000. At the end of the second quarter of 2021, Provo expects the annual tax rate to be 32% because of anticipated tax credits. Pretax income for the second quarter was $350,000. Assume no items in either quarter requiring the net-of-tax presentation.How much income tax expense is recognized in the second quarter of 2021?

Accepted Answer

A)  $103,000. 
B)  $104,000. 
C)  $112,000. 
D)  $122,500. 
E)  $208,000. 
A)  $103,000. 
B)  $104,000. 
C)  $112,000. 
D)  $122,500. 
E)  $208,000.

Question 16

When defining a reportable segment, which of the following conditions would be sufficient to allow a company to combine two operating segments for purposes of testing?

Accepted Answer

A)  The products sold by each segment are produced in the same plant. 
B)  Both segments have several customers in common. 
C)  The segments may sell different products, but they have a similar economic environment and similar business activities. 
D)  Both segments are required to adhere to U.S. Department of Labor regulations regarding immigration laws. 
E)  Both segments are owned by the same parent company. 
A)  The products sold by each segment are produced in the same plant. 
B)  Both segments have several customers in common. 
C)  The segments may sell different products, but they have a similar economic environment and similar business activities. 
D)  Both segments are required to adhere to U.S. Department of Labor regulations regarding immigration laws. 
E)  Both segments are owned by the same parent company.

Question 17

The following information for Urbanski Corporation relates to the three months ending June 30, 2021:   Urbanski uses the LIFO method to account for inventory, and expects at least 15,000 units to be on hand in the ending inventory at year-end. Purchases made in the last six months are expected to cost an average of $18 per unit.Prepare the journal entries to reflect the sales and cost of goods sold, assuming Urbanski does not expect to replace the liquidated inventory at year-end.

Accepted Answer

Journal Entries to R

Question 18

What is the appropriate treatment in an interim financial report for variances arising from the use of a standard costing system?

Accepted Answer

A)  The variances are always ignored for interim reporting. 
B)  The variances should always be reflected in gross profit on an interim income statement. 
C)  The variances expected to be absorbed by year-end should not be reflected in the interim statement. 
D)  The variances should always be reflected in the interim income statement but not the interim balance sheet. 
E)  The variances should only be reflected in the interim balance sheet. 
A)  The variances are always ignored for interim reporting. 
B)  The variances should always be reflected in gross profit on an interim income statement. 
C)  The variances expected to be absorbed by year-end should not be reflected in the interim statement. 
D)  The variances should always be reflected in the interim income statement but not the interim balance sheet. 
E)  The variances should only be reflected in the interim balance sheet.

Question 19

Wayne, Inc. has four operating segments with the following information:   What is the minimum amount of revenue an operating segment must have to be considered a reportable segment?

Accepted Answer

A)  $1,355,200. 
B)  $1,293,000. 
C)  $622,000. 
D)  $1,230,800. 
E)  $955,400. 
A)  $1,355,200. 
B)  $1,293,000. 
C)  $622,000. 
D)  $1,230,800. 
E)  $955,400.

Question 20

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands):   Which operating segments are reportable under the profit or loss test?

Accepted Answer

A)  Rakes, Pails, and Shovels. 
B)  Rakes, Pails, Shovels, and Hardware. 
C)  Rakes, Pails, and Hardware. 
D)  Rakes, Pails, Shovels, Hardware, and Accessories. 
E)  Pails and Hardware. 
A)  Rakes, Pails, and Shovels. 
B)  Rakes, Pails, Shovels, and Hardware. 
C)  Rakes, Pails, and Hardware. 
D)  Rakes, Pails, Shovels, Hardware, and Accessories. 
E)  Pails and Hardware.

What is the appropriate treatment in an interim financial report for a LIFO liquidation?

How should a change from one generally accepted accounting principle to another accepted principle be handled in a third-quarter income statement?

Wayne, Inc. has four operating segments with the following information: What is the minimum amount of assets an operating segment must have to be considered a reportable segment?

Which of the following is a criterion for determining whether an operating segment is separately reportable?

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands): In applying the asset test, what is the minimum amount an operating segment must have in order to meet the asset test for a reportable segment?

What are the two approaches that can be followed in preparing interim reports?

What two disclosure guidelines for operating segment information are designed to ensure the consistency of data reported from year to year?

Elektronix, Inc. has three operating segments with the following information: What is the minimum amount of revenue an operating segment must have to be considered a reportable segment?

Which of the following operating segment disclosures is not required by U.S. GAAP?

Which of the following statements is true according to U.S. GAAP regarding operating segment disclosure?

When defining a reportable segment, which of the following conditions would be sufficient to allow a company to combine two operating segments for purposes of testing?

What is the appropriate treatment in an interim financial report for variances arising from the use of a standard costing system?

Wayne, Inc. has four operating segments with the following information: What is the minimum amount of revenue an operating segment must have to be considered a reportable segment?

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands): Which operating segments are reportable under the profit or loss test?

Accounting for Estates and Trusts

Accounting and Reporting for Private Not-For-Profit Organizations

Accounting for State and Local Governments, Part II

Accounting for State and Local Governments, Part I

Partnerships: Termination and Liquidation

Partnerships: Formation and Operation

Accounting for Legal Reorganizations and Liquidations

Financial Reporting and the Securities and Exchange Commission

Worldwide Accounting Diversity and International Accounting Standards

Translation of Foreign Currency Financial Statements

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Consolidated Financial Statements - Ownership Patterns and Income Taxes

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements Intra-Entity Asset Transactions

Consolidated Financial Statements and Outside Ownership

Consolidations - Subsequent to the Date of Acquisition

Consolidation of Financial Information

The Equity Method of Accounting for Investments

Filters

Exam 8: Segment and Interim Reporting

What is the appropriate treatment in an interim financial report for a LIFO liquidation?

How should a change from one generally accepted accounting principle to another accepted principle be handled in a third-quarter income statement?

Wayne, Inc. has four operating segments with the following information: What is the minimum amount of assets an operating segment must have to be considered a reportable segment?

Which of the following is a criterion for determining whether an operating segment is separately reportable?

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands): In applying the asset test, what is the minimum amount an operating segment must have in order to meet the asset test for a reportable segment?

What are the two approaches that can be followed in preparing interim reports?

What two disclosure guidelines for operating segment information are designed to ensure the consistency of data reported from year to year?

Elektronix, Inc. has three operating segments with the following information: What is the minimum amount of revenue an operating segment must have to be considered a reportable segment?

Which of the following operating segment disclosures is not required by U.S. GAAP?

Which of the following statements is true according to U.S. GAAP regarding operating segment disclosure?

When defining a reportable segment, which of the following conditions would be sufficient to allow a company to combine two operating segments for purposes of testing?

What is the appropriate treatment in an interim financial report for variances arising from the use of a standard costing system?

Wayne, Inc. has four operating segments with the following information: What is the minimum amount of revenue an operating segment must have to be considered a reportable segment?

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands): Which operating segments are reportable under the profit or loss test?

Accounting for Estates and Trusts

Accounting and Reporting for Private Not-For-Profit Organizations

Accounting for State and Local Governments, Part II

Accounting for State and Local Governments, Part I

Partnerships: Termination and Liquidation

Partnerships: Formation and Operation

Accounting for Legal Reorganizations and Liquidations

Financial Reporting and the Securities and Exchange Commission

Worldwide Accounting Diversity and International Accounting Standards

Translation of Foreign Currency Financial Statements

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Consolidated Financial Statements - Ownership Patterns and Income Taxes

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements Intra-Entity Asset Transactions

Consolidated Financial Statements and Outside Ownership

Consolidations - Subsequent to the Date of Acquisition

Consolidation of Financial Information

The Equity Method of Accounting for Investments

Filters