Question 1

What is the appropriate treatment in an interim financial report for inventory with a net realizable value below cost?

Accepted Answer

A)  The loss should always be recorded in the interim period in which net realizable value drops below cost. 
B)  The loss should be recorded in the interim period in which net realizable value drops below cost if the loss is considered temporary. 
C)  The loss should be recorded in the interim period in which net realizable value drops below cost if the loss is considered permanent. 
D)  The loss should be ignored for interim reporting purposes. 
E)  There is no loss to report. 
A)  The loss should always be recorded in the interim period in which net realizable value drops below cost. 
B)  The loss should be recorded in the interim period in which net realizable value drops below cost if the loss is considered temporary. 
C)  The loss should be recorded in the interim period in which net realizable value drops below cost if the loss is considered permanent. 
D)  The loss should be ignored for interim reporting purposes. 
E)  There is no loss to report.

Question 2

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

Accepted Answer

The related items in regard to

Question 3

When totaling the revenues to use as the basis for the 75% rule, what is the 75% hurdle that must be exceeded by the revenues of the reportable segments?

Accepted Answer

A)  $ 1,670,000. 
B)  $12,525,000. 
C)  $15,487,500. 
D)  $16,700,000. 
E)  $20,650,000. 
A)  $ 1,670,000. 
B)  $12,525,000. 
C)  $15,487,500. 
D)  $16,700,000. 
E)  $20,650,000.

Question 4

According to U.S.GAAP, what revenues and expenses included in segment profit or loss need to be disclosed?

Accepted Answer

The revenues and expenses included in se

Question 5

Which of the following statements is false concerning the number of operating segments that should be disclosed?

Accepted Answer

A)  At least 75 percent of total company sales made to outsiders should be presented. 
B)  Even though an operating segment has been reportable in the past and is of continuing significance, it must meet at least one of the three reporting tests to report separately in the current year. 
C)  If the 75 percent rule is not met by the results of applying all three reporting tests, additional segments must be disclosed separately despite their failure to satisfy even one of the three quantitative thresholds. 
D)  If an operating segment qualifies for disclosure in the current year, prior period segment data presented for comparative purposes must be restated to reflect the newly reportable segment as a separate segment. 
E)  The practical limit to the number of operating segments is 10. 
A)  At least 75 percent of total company sales made to outsiders should be presented. 
B)  Even though an operating segment has been reportable in the past and is of continuing significance, it must meet at least one of the three reporting tests to report separately in the current year. 
C)  If the 75 percent rule is not met by the results of applying all three reporting tests, additional segments must be disclosed separately despite their failure to satisfy even one of the three quantitative thresholds. 
D)  If an operating segment qualifies for disclosure in the current year, prior period segment data presented for comparative purposes must be restated to reflect the newly reportable segment as a separate segment. 
E)  The practical limit to the number of operating segments is 10.

Question 6

List the five aggregation criteria that need to be considered by management in determining whether business activities and environments are similar.

Accepted Answer

The five aggregation criteria are: (a) t

Question 7

Which of the following is reported for interim financial reports using the discrete approach?

Accepted Answer

A)  Income tax expense. 
B)  Seasonal items. 
C)  Change in accounting principle. 
D)  Property tax expense. 
E)  Discontinued operations. 
A)  Income tax expense. 
B)  Seasonal items. 
C)  Change in accounting principle. 
D)  Property tax expense. 
E)  Discontinued operations.

Question 8

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 9

What is the major objective of segment reporting?

Accepted Answer

According to U.S. GAAP, the objective of

Question 10

What is the total amount of revenues in applying the revenue test?

Accepted Answer

A)  $794. 
B)  $808. 
C)  $892. 
D)  $906. 
E)  $934. 
A)  $794. 
B)  $808. 
C)  $892. 
D)  $906. 
E)  $934.

Question 11

If a company does not include a balance sheet and a statement of cash flows in an interim report, then which of the following items must be separately disclosed for that interim period?

Accepted Answer

A)  The balance of long-term liabilities. 
B)  Net working capital. 
C)  The change in stockholders'equity. 
D)  The balance of cash and cash equivalents. 
E)  The balance of retained earnings. 
A)  The balance of long-term liabilities. 
B)  Net working capital. 
C)  The change in stockholders'equity. 
D)  The balance of cash and cash equivalents. 
E)  The balance of retained earnings.

Question 12

According to U.S.GAAP, what general information about an operating segment must be disclosed?

Accepted Answer

The general information about an operati

Question 13

The amount of gross profit for the first quarter is:

Accepted Answer

A)  $ 83,000 
B)  $ 87,000 
C)  $ 90,000 
D)  $221,000 
E)  $250,000 
A)  $ 83,000 
B)  $ 87,000 
C)  $ 90,000 
D)  $221,000 
E)  $250,000

Question 14

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 15

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 16

Which of the following statements is true regarding the identifying factors used to determine which components of a business are operating segments?

Accepted Answer

A)  Operating segments are components of an enterprise that engage in business activities and from which it only recognizes revenues. 
B)  The corporate controller reviews each operating segment's operating results to assess performance. 
C)  A component may be classified as an operating segment without revenues assuming that it generates a material level of expense. 
D)  An organizational unit can be an operating segment even if all of its revenues or expenses result from transactions with other segments. 
E)  All parts of a company must be included in an operating segment. 
A)  Operating segments are components of an enterprise that engage in business activities and from which it only recognizes revenues. 
B)  The corporate controller reviews each operating segment's operating results to assess performance. 
C)  A component may be classified as an operating segment without revenues assuming that it generates a material level of expense. 
D)  An organizational unit can be an operating segment even if all of its revenues or expenses result from transactions with other segments. 
E)  All parts of a company must be included in an operating segment.

Question 17

What is the minimum amount of revenue that each of these segments must earn to be considered separately reportable?

Accepted Answer

A)  $4,343,684. 
B)  $4,826,316. 
C)  $5,067,632. 
D)  $4,585,000. 
E)  $4,705,658. 
A)  $4,343,684. 
B)  $4,826,316. 
C)  $5,067,632. 
D)  $4,585,000. 
E)  $4,705,658.

Question 18

According to U.S.GAAP, which of the following would be an acceptable grouping by a U.S.company for presentation of information by geographic area?

Accepted Answer

A)  France, Germany, All Other Countries. 
B)  United States, Europe, Canada. 
C)  United States, Africa, Europe, Asia. 
D)  United States, Canada, Mexico, Germany. 
E)  North America, Spain, All Other Countries. 
A)  France, Germany, All Other Countries. 
B)  United States, Europe, Canada. 
C)  United States, Africa, Europe, Asia. 
D)  United States, Canada, Mexico, Germany. 
E)  North America, Spain, All Other Countries.

Question 19

What is the minimum amount of assets an operating segment must have to be considered a reportable segment?

Accepted Answer

A)  $ 1,400,000. 
B)  $ 2,500,000. 
C)  $ 4,100,000. 
D)  $ 5,000,000. 
E)  $25,000,000. 
A)  $ 1,400,000. 
B)  $ 2,500,000. 
C)  $ 4,100,000. 
D)  $ 5,000,000. 
E)  $25,000,000.

Question 20

For companies that provide quarterly reports, how is the fourth quarter reported?

Accepted Answer

A)  Every company that reports for the first three quarters must also publish a fourth-quarter report. 
B)  A fourth-quarter report is not required. 
C)  Companies must publish a fourth-quarter report if there are significant changes from the third quarter. 
D)  The SEC requires selected quarterly financial data to be reported separately as a fourth-quarter report. 
E)  When fourth-quarter financial statements are provided, special accounting items of that quarter must also be separately disclosed in the annual financial statements. 
A)  Every company that reports for the first three quarters must also publish a fourth-quarter report. 
B)  A fourth-quarter report is not required. 
C)  Companies must publish a fourth-quarter report if there are significant changes from the third quarter. 
D)  The SEC requires selected quarterly financial data to be reported separately as a fourth-quarter report. 
E)  When fourth-quarter financial statements are provided, special accounting items of that quarter must also be separately disclosed in the annual financial statements.

Exam 8: Segment and Interim Reporting

What is the appropriate treatment in an interim financial report for inventory with a net realizable value below cost?

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

When totaling the revenues to use as the basis for the 75% rule, what is the 75% hurdle that must be exceeded by the revenues of the reportable segments?

According to U.S.GAAP, what revenues and expenses included in segment profit or loss need to be disclosed?

Which of the following statements is false concerning the number of operating segments that should be disclosed?

List the five aggregation criteria that need to be considered by management in determining whether business activities and environments are similar.

Which of the following is reported for interim financial reports using the discrete approach?

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

What is the major objective of segment reporting?

What is the total amount of revenues in applying the revenue test?

If a company does not include a balance sheet and a statement of cash flows in an interim report, then which of the following items must be separately disclosed for that interim period?

According to U.S.GAAP, what general information about an operating segment must be disclosed?

The amount of gross profit for the first quarter is:

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

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

Which of the following statements is true regarding the identifying factors used to determine which components of a business are operating segments?

What is the minimum amount of revenue that each of these segments must earn to be considered separately reportable?

According to U.S.GAAP, which of the following would be an acceptable grouping by a U.S.company for presentation of information by geographic area?

What is the minimum amount of assets an operating segment must have to be considered a reportable segment?

For companies that provide quarterly reports, how is the fourth quarter reported?

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

A: Consolidated Financial Statements Intra-Entity Asset Transactions

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

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

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

A: Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

A: Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

A: Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

Accounting for Estates and Trusts

A: Accounting for Estates and Trusts

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