Question 1

What is the purpose of the U.S.GAAP seventy-five percent requirement for industry segment disclosure?

Accepted Answer

A substantial portion of the company's o

Question 2

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 3

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 4

Betsy Kirkland, Inc.incurred a flood loss during the first quarter of 2018 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 5

Assuming Baker makes the change in the first quarter of 2017, how much is reported as net income for the first quarter of 2017?

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 6

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 7

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 8

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 9

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

The answer of Whitley Corporation identified four operating segments: Automotive,...

Question 10

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 11

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

Accepted Answer

A)  $ 9,450,000. 
B)  $ 8,624,272. 
C)  $10,643,000. 
D)  $12,936,408. 
E)  $10,413,000. 
A)  $ 9,450,000. 
B)  $ 8,624,272. 
C)  $10,643,000. 
D)  $12,936,408. 
E)  $10,413,000.

Question 12

What information does U.S.GAAP require to be disclosed for a major customer?

Accepted Answer

A)  The identity of the customer. 
B)  The operating segment reporting sales to the customer. 
C)  The geographic area of the customer. 
D)  The specific products or services purchased by the customer. 
E)  The length of time the customer has been a customer of the company. 
A)  The identity of the customer. 
B)  The operating segment reporting sales to the customer. 
C)  The geographic area of the customer. 
D)  The specific products or services purchased by the customer. 
E)  The length of time the customer has been a customer of the company.

Question 13

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 14

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 15

According to the revenue test, which segments would require disaggregation?

Accepted Answer

A)  A, B, D, and E. 
B)  A and B. 
C)  B and C. 
D)  A, B, and D. 
E)  C, D, and E. 
A)  A, B, D, and E. 
B)  A and B. 
C)  B and C. 
D)  A, B, and D. 
E)  C, D, and E.

Exam 8: A: Segment and Interim Reporting

What is the purpose of the U.S.GAAP seventy-five percent requirement for industry segment disclosure?

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

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

Assuming Baker makes the change in the first quarter of 2017, how much is reported as net income for the first quarter of 2017?

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

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

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 an operating segment must have to be considered a reportable segment?

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

What information does U.S.GAAP require to be disclosed for a major customer?

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

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

According to the revenue test, which segments would require disaggregation?

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

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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