Question 1

According to authoritative accounting literature, which of the following are required to be disclosed in interim reports?

Accepted Answer

A)  Cash flows from investing activities. 
B)  Change in cash. 
C)  Total current liabilities. 
D)  Total assets. 
E)  Gross revenues. 
A)  Cash flows from investing activities. 
B)  Change in cash. 
C)  Total current liabilities. 
D)  Total assets. 
E)  Gross revenues.

Question 2

Which of the following is not correct regarding inventory procedures reported in an interim financial statement?

Accepted Answer

A)  LIFO liquidations a company expects to be replaced by year-end should be recorded in cost of goods sold, quantified at expected replacement cost rather than original LIFO cost. 
B)  Lower-of-cost-or-net realizable value adjustments are not made for the interim period if they are expected to reverse by the end of the year. 
C)  Variances in a standard costing system are reported at the end of the interim period unless they are expected to be absorbed by year-end. 
D)  FIFO is remeasured using the LIFO method in an interim financial statement. 
E)  LIFO liquidations not expected to be replaced by the end of the year are reflected in cost of goods sold at original LIFO cost. 
A)  LIFO liquidations a company expects to be replaced by year-end should be recorded in cost of goods sold, quantified at expected replacement cost rather than original LIFO cost. 
B)  Lower-of-cost-or-net realizable value adjustments are not made for the interim period if they are expected to reverse by the end of the year. 
C)  Variances in a standard costing system are reported at the end of the interim period unless they are expected to be absorbed by year-end. 
D)  FIFO is remeasured using the LIFO method in an interim financial statement. 
E)  LIFO liquidations not expected to be replaced by the end of the year are reflected in cost of goods sold at original LIFO cost.

Question 3

Natarajan, Inc. had the following operating segments, with the indicated amounts of segment revenues and segment expenses:   For purposes of the profit or loss test, segment C's operating profit or (loss) is

Accepted Answer

A)  $1,300,000. 
B)  $700,000. 
C)  $2,000,000. 
D)  $200,000. 
E)  $(200,000). 
A)  $1,300,000. 
B)  $700,000. 
C)  $2,000,000. 
D)  $200,000. 
E)  $(200,000).

Question 4

The following items are required to be disclosed for each operating segment except:

Accepted Answer

A)  Factors used to allocate company-wide pension expense. 
B)  Revenues from transactions with other operating segments. 
C)  Interest revenue and interest expense. 
D)  Depreciation, depletion, and amortization expense. 
E)  Revenues from external customers. 
A)  Factors used to allocate company-wide pension expense. 
B)  Revenues from transactions with other operating segments. 
C)  Interest revenue and interest expense. 
D)  Depreciation, depletion, and amortization expense. 
E)  Revenues from external customers.

Question 5

How does a company measure income tax expense to be reported in an interim period?

Accepted Answer

Income tax expense related to interim pe

Question 6

Faru Co. identified five industry segments: (1) plastics, (2) metals, (3) lumber, (4) paper, and (5) finance. The company properly consolidated the segments when it prepared its annual financial statements. Information describing each segment is presented below (in thousands).   Prepare the profit or loss test and determine which of these segments was separately reportable.

Accepted Answer

Revenues include sales to outside partie

Question 7

Which items of information are required to be included in interim reports for each operating segment?

Accepted Answer

The items of information required to be

Question 8

Which tests must a company use to determine which operating segments require separate disclosure?

Accepted Answer

A)  Revenue test and asset test. 
B)  Revenue test, profit or loss test, and asset test. 
C)  Revenue test and profit or loss test. 
D)  Profit or loss test and asset test. 
E)  Revenue test, asset test, and liability test. 
A)  Revenue test and asset test. 
B)  Revenue test, profit or loss test, and asset test. 
C)  Revenue test and profit or loss test. 
D)  Profit or loss test and asset test. 
E)  Revenue test, asset test, and liability test.

Question 9

Blanton Corporation is comprised of five operating segments. Information about each of these segments is as follows (in thousands):   Required:
A) Which operating segments are reportable under the revenue test?
B) What is the total amount of revenues in applying the revenue test?
C) Which operating segments are reportable under the profit or loss test?
D) In applying the profit or loss test, what is the minimum amount an operating segment must have in order to meet the profit or loss test for a reportable segment?
E) Which operating segments are reportable under the asset test?
F) 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?
G) Which operating segments are reportable?
H) According to the test results for reportable segments, is there a sufficient number of reported segments or should any additional segments also be disclosed? Explain the reason for your conclusion.

Accepted Answer

a. @#IMG-DLM& b. @#IMG-DLM& c. @#IMG-DLM& d.Benchmark: $65 × 10% = $6.

Question 10

Betsy Kirkland, Inc. incurred a flood loss during the first quarter of 2021 that is deemed both unusual and not expected to recur again in the near future. The loss is considered immaterial to the twelve-month period, but is material in amount relative to the first quarter. The proper accounting treatment in the first quarter interim statement is to:

Accepted Answer

A)  Ignore the loss. 
B)  Record the loss in the first quarter as an unusual loss, net of income taxes. 
C)  Record one-fourth of the loss in the first quarter as an unusual loss, net of income taxes. 
D)  Ignore the loss in the first quarter, and record it in the annual statement only. 
E)  Record the loss in the first quarter, but not as an unusual loss, and disclose the loss in a separate note or in the income statement as a separate line item. 
A)  Ignore the loss. 
B)  Record the loss in the first quarter as an unusual loss, net of income taxes. 
C)  Record one-fourth of the loss in the first quarter as an unusual loss, net of income taxes. 
D)  Ignore the loss in the first quarter, and record it in the annual statement only. 
E)  Record the loss in the first quarter, but not as an unusual loss, and disclose the loss in a separate note or in the income statement as a separate line item.

Question 11

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 2021, compute net income per common share.

Accepted Answer

A)  $4.92. 
B)  $4.95. 
C)  $5.00. 
D)  $5.05. 
E)  $5.28. 
A)  $4.92. 
B)  $4.95. 
C)  $5.00. 
D)  $5.05. 
E)  $5.28.

Question 12

Cement Company, Inc. began the first quarter with 1,000 units of inventory costing $25 per unit. During the first quarter, 3,000 units were purchased at a cost of $40 per unit, and sales of 3,400 units at $65 per units were made. During the second quarter, the company expects to replace the units of beginning inventory sold at a cost of $45 per unit. Cement Company uses the LIFO method to account for inventory.What is the correct journal entry to record cost of goods sold at the end of the first quarter?

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 13

How should seasonal revenues be reported in an interim report?

Accepted Answer

A)  Disclose the seasonal nature of business operations, and include a pro forma report for the next 12-month period. 
B)  Disclose the seasonal nature of business operations but do not include other reports supplemental to the interim report. 
C)  Disclose the seasonal nature of business operations, and consider a report for the 12-month period ended at the interim date to supplement the interim report. 
D)  The financial statements should be adjusted to reflect the assumption that no seasonal revenues could be recognized. 
E)  Seasonal revenues have no particular reporting requirement. 
A)  Disclose the seasonal nature of business operations, and include a pro forma report for the next 12-month period. 
B)  Disclose the seasonal nature of business operations but do not include other reports supplemental to the interim report. 
C)  Disclose the seasonal nature of business operations, and consider a report for the 12-month period ended at the interim date to supplement the interim report. 
D)  The financial statements should be adjusted to reflect the assumption that no seasonal revenues could be recognized. 
E)  Seasonal revenues have no particular reporting requirement.

Question 14

Peterson Corporation 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)  $3,900. 
B)  $4,000. 
C)  $4,100. 
D)  $4,200. 
E)  $4,400. 
A)  $3,900. 
B)  $4,000. 
C)  $4,100. 
D)  $4,200. 
E)  $4,400.

Question 15

Nigel Corp. had six different operating segments reporting the following operating profit and loss figures:   Which one of the following statements is true?

Accepted Answer

A)  Segment A is a reportable segment based on this test. 
B)  Segment B is a reportable segment based on this test. 
C)  Segment E is a reportable segment based on this test. 
D)  Segment C is not a reportable segment based on this test. 
E)  Segment D is a reportable segment based on this test. 
A)  Segment A is a reportable segment based on this test. 
B)  Segment B is a reportable segment based on this test. 
C)  Segment E is a reportable segment based on this test. 
D)  Segment C is not a reportable segment based on this test. 
E)  Segment D is a reportable segment based on this test.

Question 16

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 expects to maintain 11,000 units in inventory at year-end.

Accepted Answer

Journal Entries to Record Sale

Question 17

Harrison Company, Inc. began operations on January 1, 2020, and applied the LIFO method for inventory valuation. On June 10, 2021, Harrison adopted the FIFO method of accounting for inventory. Additional information is as follows:   The LIFO method was applied during the first quarter of 2021 and the FIFO method was applied during the second quarter of 2021 in computing income, above. Harrison's effective income tax rate is 40%. Harrison has 500,000 shares of common stock outstanding at all times.Prepare a schedule showing the calculation of net income and earnings per share to be reported by Harrison for the three-month period and the six-month period ended June 30, 2020 and 2021.

Accepted Answer

Net Income and Earni

Question 18

What related items need to be disclosed in regard to total segment assets?

Accepted Answer

The related items in regard to

Question 19

According to International Financial Reporting Standards (IFRS), all of the following are part of minimum components of interim financial reporting except:

Accepted Answer

A)  A condensed statement of cash flows. 
B)  A condensed statement of financial position. 
C)  A condensed statement of accumulated pension liabilities. 
D)  A condensed statement of net income and comprehensive income. 
E)  A condensed statement of changes in equity. 
A)  A condensed statement of cash flows. 
B)  A condensed statement of financial position. 
C)  A condensed statement of accumulated pension liabilities. 
D)  A condensed statement of net income and comprehensive income. 
E)  A condensed statement of changes in equity.

Question 20

Harrison Company, Inc. began operations on January 1, 2020, and applied the LIFO method for inventory valuation. On June 10, 2021, Harrison adopted the FIFO method of accounting for inventory. Additional information is as follows:   The LIFO method was applied during the first quarter of 2021 and the FIFO method was applied during the second quarter of 2021 in computing income, above. Harrison's effective income tax rate is 40%. Harrison has 500,000 shares of common stock outstanding at all times.Compute the after-tax effect of Harrison's change in inventory method.

Accepted Answer

The answer of Harrison Company, Inc. began operations on January...

According to authoritative accounting literature, which of the following are required to be disclosed in interim reports?

Which of the following is not correct regarding inventory procedures reported in an interim financial statement?

Natarajan, Inc. had the following operating segments, with the indicated amounts of segment revenues and segment expenses: For purposes of the profit or loss test, segment C's operating profit or (loss) is

The following items are required to be disclosed for each operating segment except:

How does a company measure income tax expense to be reported in an interim period?

Which items of information are required to be included in interim reports for each operating segment?

Which tests must a company use to determine which operating segments require separate disclosure?

How should seasonal revenues be reported in an interim report?

Peterson Corporation 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?

Nigel Corp. had six different operating segments reporting the following operating profit and loss figures: Which one of the following statements is true?

What related items need to be disclosed in regard to total segment assets?

According to International Financial Reporting Standards (IFRS), all of the following are part of minimum components of interim financial reporting except:

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

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Exam 8: Segment and Interim Reporting

According to authoritative accounting literature, which of the following are required to be disclosed in interim reports?

Which of the following is not correct regarding inventory procedures reported in an interim financial statement?

Natarajan, Inc. had the following operating segments, with the indicated amounts of segment revenues and segment expenses: For purposes of the profit or loss test, segment C's operating profit or (loss) is

The following items are required to be disclosed for each operating segment except:

How does a company measure income tax expense to be reported in an interim period?

Which items of information are required to be included in interim reports for each operating segment?

Which tests must a company use to determine which operating segments require separate disclosure?

How should seasonal revenues be reported in an interim report?

Peterson Corporation 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?

Nigel Corp. had six different operating segments reporting the following operating profit and loss figures: Which one of the following statements is true?

What related items need to be disclosed in regard to total segment assets?

According to International Financial Reporting Standards (IFRS), all of the following are part of minimum components of interim financial reporting except:

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