Question 1

Under IFRS 8, which of the following criteria is NOT considered by all segments that are considered reportable business segments?

Accepted Answer

A) The segment must have revenue that is one-tenth or more of combined revenue. 
B) The segment must have profit that is 10% or more of combined profit of all segments with profit. 
C) The segment must have revenue that is more than half from external sources. 
D) The segment must have assets that are 10% or more of combined segment assets. 
A) The segment must have revenue that is one-tenth or more of combined revenue. 
B) The segment must have profit that is 10% or more of combined profit of all segments with profit. 
C) The segment must have revenue that is more than half from external sources. 
D) The segment must have assets that are 10% or more of combined segment assets.

Question 2

Why do financial analysts and other readers of financial statements want segmented information?

Accepted Answer

A) Consolidation obscures facts that may be important for evaluating financial statements. 
B) More information is always preferred to less information. 
C) To ensure that illegal business combinations are not taking place. 
D) Models for economic forecasting have not been developed using consolidated financial statement information. 
A) Consolidation obscures facts that may be important for evaluating financial statements. 
B) More information is always preferred to less information. 
C) To ensure that illegal business combinations are not taking place. 
D) Models for economic forecasting have not been developed using consolidated financial statement information.

Question 3

Under both IFRS and U.S.GAAP, which of the following methods should be used by an investing entity to report accounting for investment in nonconsolidated subsidiaries?

Accepted Answer

A) Equity method 
B) Fair value 
C) Proportionate consolidation 
D) Parent concept 
A) Equity method 
B) Fair value 
C) Proportionate consolidation 
D) Parent concept

Question 4

What is a "holding gain?"

Accepted Answer

A) The increase in owners' equity resulting from maintaining monetary assets during a period of inflation 
B) The increase in income resulting from general purchasing power accounting during a period of inflation 
C) The increase in owners' equity resulting from holding nonmonetary assets during a period of inflation 
D) The increase in income caused by paying liabilities with cheaper dollars 
A) The increase in owners' equity resulting from maintaining monetary assets during a period of inflation 
B) The increase in income resulting from general purchasing power accounting during a period of inflation 
C) The increase in owners' equity resulting from holding nonmonetary assets during a period of inflation 
D) The increase in income caused by paying liabilities with cheaper dollars

Question 5

Under IAS 27, how is "control" defined?

Accepted Answer

A) Ownership of 50% of more of the voting shares of another entity 
B) Representation on another entity's board of directors 
C) The power to govern financial and operating policies of an entity so as to obtain the benefits from its activities 
D) Ownership of 30% or more of the voting shares of another entity 
A) Ownership of 50% of more of the voting shares of another entity 
B) Representation on another entity's board of directors 
C) The power to govern financial and operating policies of an entity so as to obtain the benefits from its activities 
D) Ownership of 30% or more of the voting shares of another entity

Question 6

Prior to 2007, which method of accounting for inflation most closely represented the supplemental reporting required in Mexico?

Accepted Answer

A) Current replacement cost 
B) Current cost 
C) General purchasing power 
D) Historical cost 
A) Current replacement cost 
B) Current cost 
C) General purchasing power 
D) Historical cost

Question 7

According to both IFRS 8 and U.S.GAAP, which of the following information should be disclosed for each separate reportable operating segment?

Accepted Answer

A) The factors used to identify operating segments 
B) Total liabilities for each operating segment 
C) Total compensation expense for each operating segment 
D) Total rent expense for each operating segment 
A) The factors used to identify operating segments 
B) Total liabilities for each operating segment 
C) Total compensation expense for each operating segment 
D) Total rent expense for each operating segment

Question 8

According to IFRS 3, which of the following statements is true about the treatment of Goodwill arising from business combinations?

Accepted Answer

A) It is capitalized and amortized over a period of no more than 40 years. 
B) It is expensed in the year the subsidiary is acquired. 
C) It is required to be tested for impairment every year. 
D) It is amortized over between 5 and 40 years. 
A) It is capitalized and amortized over a period of no more than 40 years. 
B) It is expensed in the year the subsidiary is acquired. 
C) It is required to be tested for impairment every year. 
D) It is amortized over between 5 and 40 years.

Question 9

Since 2003, what method for supplemental disclosure of inflation-adjusted financial statements is required of all companies affected by the IASB standards?

Accepted Answer

A) No rule is currently in place that generally requires inflation-adjusted financial statements. 
B) General purchasing power method must be used. 
C) Current replacement cost method must be used. 
D) Companies have the option of using current cost or historical cost. 
A) No rule is currently in place that generally requires inflation-adjusted financial statements. 
B) General purchasing power method must be used. 
C) Current replacement cost method must be used. 
D) Companies have the option of using current cost or historical cost.

Question 10

How must Goodwill resulting from business combinations be treated under U.S.GAAP?

Accepted Answer

A) It must be amortized over a period of no more than 40 years. 
B) It must be expensed when it is acquired. 
C) It must be written down when its fair value is less than its carrying value. 
D) It must be written down in no less than 5 years and no more than 40 years. 
A) It must be amortized over a period of no more than 40 years. 
B) It must be expensed when it is acquired. 
C) It must be written down when its fair value is less than its carrying value. 
D) It must be written down in no less than 5 years and no more than 40 years.

Question 11

Which of the following disclosures is required by U.S.GAAP in addition to separate reporting for operating segments?

Accepted Answer

A) Operating income for each country in which a material amount of revenue is derived 
B) Additions to long-lived assets where such assets are hard to be readily removed 
C) Revenues and long-lived assets for each country that constitutes 10% of more of the combined revenues or assets 
D) Operating income adjusted for inflation for each country where it has significant operations 
A) Operating income for each country in which a material amount of revenue is derived 
B) Additions to long-lived assets where such assets are hard to be readily removed 
C) Revenues and long-lived assets for each country that constitutes 10% of more of the combined revenues or assets 
D) Operating income adjusted for inflation for each country where it has significant operations

Question 12

Which method of accounting for changing prices (inflation) reflects current replacement cost of specific assets?

Accepted Answer

A) Current replacement cost method 
B) General purchasing power method 
C) Temporal method 
D) Current rate method 
A) Current replacement cost method 
B) General purchasing power method 
C) Temporal method 
D) Current rate method

Question 13

What term does IAS 11 use for "a contractual arrangement whereby two or more parties having joint control have right to the net assets of the arrangement"?

Accepted Answer

A) Merger 
B) Consolidation 
C) Joint venture 
D) Business combination 
A) Merger 
B) Consolidation 
C) Joint venture 
D) Business combination

Question 14

What issue of reporting effects of changing prices is addressed by IAS 29, issued by the International Accounting Standards Board in 1989?

Accepted Answer

A) Choice between current replacement cost and general purchasing power method 
B) Making inflation-adjusted reporting optional or required 
C) Specifying the European Central Bank as the official source of inflation rates in the European Union 
D) Mandating inflation adjustment for primary financial statements of companies in hyperinflationary economies 
A) Choice between current replacement cost and general purchasing power method 
B) Making inflation-adjusted reporting optional or required 
C) Specifying the European Central Bank as the official source of inflation rates in the European Union 
D) Mandating inflation adjustment for primary financial statements of companies in hyperinflationary economies

Question 15

Which of the following tests is performed to determine if an operating segment should be reported separately?

Accepted Answer

A) Liability test 
B) Asset test 
C) Impairment test 
D) Expense test 
A) Liability test 
B) Asset test 
C) Impairment test 
D) Expense test

Under IFRS 8, which of the following criteria is NOT considered by all segments that are considered reportable business segments?

Why do financial analysts and other readers of financial statements want segmented information?

Under both IFRS and U.S.GAAP, which of the following methods should be used by an investing entity to report accounting for investment in nonconsolidated subsidiaries?

What is a "holding gain?"

Under IAS 27, how is "control" defined?

Prior to 2007, which method of accounting for inflation most closely represented the supplemental reporting required in Mexico?

According to both IFRS 8 and U.S.GAAP, which of the following information should be disclosed for each separate reportable operating segment?

According to IFRS 3, which of the following statements is true about the treatment of Goodwill arising from business combinations?

Since 2003, what method for supplemental disclosure of inflation-adjusted financial statements is required of all companies affected by the IASB standards?

How must Goodwill resulting from business combinations be treated under U.S.GAAP?

Which of the following disclosures is required by U.S.GAAP in addition to separate reporting for operating segments?

Which method of accounting for changing prices (inflation) reflects current replacement cost of specific assets?

What term does IAS 11 use for "a contractual arrangement whereby two or more parties having joint control have right to the net assets of the arrangement"?

What issue of reporting effects of changing prices is addressed by IAS 29, issued by the International Accounting Standards Board in 1989?

Which of the following tests is performed to determine if an operating segment should be reported separately?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters

Exam 9: Additional Financial Reporting Issues

Under IFRS 8, which of the following criteria is NOT considered by all segments that are considered reportable business segments?

Why do financial analysts and other readers of financial statements want segmented information?

Under both IFRS and U.S.GAAP, which of the following methods should be used by an investing entity to report accounting for investment in nonconsolidated subsidiaries?

What is a "holding gain?"

Under IAS 27, how is "control" defined?

Prior to 2007, which method of accounting for inflation most closely represented the supplemental reporting required in Mexico?

According to both IFRS 8 and U.S.GAAP, which of the following information should be disclosed for each separate reportable operating segment?

According to IFRS 3, which of the following statements is true about the treatment of Goodwill arising from business combinations?

Since 2003, what method for supplemental disclosure of inflation-adjusted financial statements is required of all companies affected by the IASB standards?

How must Goodwill resulting from business combinations be treated under U.S.GAAP?

Which of the following disclosures is required by U.S.GAAP in addition to separate reporting for operating segments?

Which method of accounting for changing prices (inflation) reflects current replacement cost of specific assets?

What term does IAS 11 use for "a contractual arrangement whereby two or more parties having joint control have right to the net assets of the arrangement"?

What issue of reporting effects of changing prices is addressed by IAS 29, issued by the International Accounting Standards Board in 1989?

Which of the following tests is performed to determine if an operating segment should be reported separately?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters