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

Harrison Company, Inc. began operations on January 1, 2010, and applied the LIFO method for inventory valuation. On June 10, 2011, Harrison adopted the FIFO method of accounting for inventory. Additional information is as follows:   The LIFO method was applied during the first quarter of 2011 and the FIFO method was applied during the second quarter of 2011 in computing income, above. Harrison's effective income tax rate is 40 percent. 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, 2010 and 2011.

Accepted Answer

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

Question 3

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 4

Provo, Inc. has an estimated annual tax rate of 35 percent in the first quarter of 2011. Pretax income for the first quarter was $300,000. At the end of the second quarter of 2011, Provo expects the annual tax rate to be 32 percent 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 first quarter of 2011?

Accepted Answer

A)  $0. 
B)  $26,250. 
C)  $96,000. 
D)  $105,000. 
E)  $112,000. 
A)  $0. 
B)  $26,250. 
C)  $96,000. 
D)  $105,000. 
E)  $112,000.

Question 5

What is the appropriate treatment in an interim financial report for inventory that has cost below market value?

Accepted Answer

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

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)  Extraordinary items. 
D)  Discontinued operations. 
E)  Liabilities. 
A)  Interest expense. 
B)  Intersegment sales. 
C)  Extraordinary items. 
D)  Discontinued operations. 
E)  Liabilities.

Question 7

The Rivers Co. had four separate operating segments:   What amount of revenues must be generated from one customer before that party must be identified as a major customer?

Accepted Answer

A)  $57,680. 
B)  $64,960. 
C)  $52,640. 
D)  $78,960. 
E)  $63,560. 
A)  $57,680. 
B)  $64,960. 
C)  $52,640. 
D)  $78,960. 
E)  $63,560.

Question 8

Which of the following is false with regard to accounting standards for segment reporting according to International Financial Reporting Standards (IFRS) and U.S. GAAP?

Accepted Answer

A)  IFRS and U.S. GAAP do not each require disclosure of segment liabilities. 
B)  IFRS and U.S. GAAP both require disclosure of intangible assets attributable to geographic segments. 
C)  According to IFRS, operating segments can be based on products and services. 
D)  According to IFRS, operating segments can be based on geographic areas. 
E)  IFRS and U.S. GAAP both require disclosure of total assets. 
A)  IFRS and U.S. GAAP do not each require disclosure of segment liabilities. 
B)  IFRS and U.S. GAAP both require disclosure of intangible assets attributable to geographic segments. 
C)  According to IFRS, operating segments can be based on products and services. 
D)  According to IFRS, operating segments can be based on geographic areas. 
E)  IFRS and U.S. GAAP both require disclosure of total assets.

Question 9

Faru Co. identified five industry segments: (1) plastics, (2) metals, (3) lumber, (4) paper, and (5) finance. Each of these segments had been consolidated appropriately by the company in producing 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 10

Which of the following statements is true regarding the reporting of revenues in an interim report?

Accepted Answer

A)  Revenues should be recognized on the income tax basis for interim reporting. 
B)  Revenues should be recognized in interim periods in the same way as they are on an annual basis. 
C)  Projected losses on long-term contracts should be deferred to the annual report. 
D)  The percentage-of-completion method of reporting long-term construction projects is not an acceptable method for interim reporting. 
E)  Revenues should be recognized on the cash basis of accounting for interim reporting. 
A)  Revenues should be recognized on the income tax basis for interim reporting. 
B)  Revenues should be recognized in interim periods in the same way as they are on an annual basis. 
C)  Projected losses on long-term contracts should be deferred to the annual report. 
D)  The percentage-of-completion method of reporting long-term construction projects is not an acceptable method for interim reporting. 
E)  Revenues should be recognized on the cash basis of accounting for interim reporting.

Question 11

Elektronix, Inc. has three operating segments with the following information:   Which operating segments are separately reportable under the revenues test?

Accepted Answer

A)  DVDs only. 
B)  DVDs and MP3s. 
C)  DVDs and VCRs. 
D)  VCRs and MP3s. 
E)  DVDs, VCRs, and MP3s. 
A)  DVDs only. 
B)  DVDs and MP3s. 
C)  DVDs and VCRs. 
D)  VCRs and MP3s. 
E)  DVDs, VCRs, and MP3s.

Question 12

What is the major objective of segment reporting?

Accepted Answer

According to U.S. GAAP, the objective of

Question 13

The hardware operating segment of Bloom Corporation has the following revenues for the year ended December 31, 2011:   For purposes of the revenue test, what amount will be used as total revenues of the hardware operating segment?

Accepted Answer

A)  $417,000. 
B)  $440,000. 
C)  $424,000. 
D)  $460,000. 
E)  $480,000. 
A)  $417,000. 
B)  $440,000. 
C)  $424,000. 
D)  $460,000. 
E)  $480,000.

Question 14

Elektronix, Inc. has three operating segments with the following information:   Which operating segments are separately reportable under the assets test?

Accepted Answer

A)  DVDs only. 
B)  DVDs and MP3s. 
C)  DVDs and VCRs. 
D)  VCRs and MP3s. 
E)  DVDs, VCRs, and MP3s. 
A)  DVDs only. 
B)  DVDs and MP3s. 
C)  DVDs and VCRs. 
D)  VCRs and MP3s. 
E)  DVDs, VCRs, and MP3s.

Question 15

Which of the following items of information are required to be included in interim reports for each operating segment? (I.) Revenues from external customers
(II)) Segment profit or loss
(III.) Reconciliation of segment profit or loss to the enterprise's total income before taxes
(IV)) Intersegment revenues

Accepted Answer

A)  I and III only. 
B)  I and II only. 
C)  I, II and III. 
D)  II and III only. 
E)  I, II, III, and IV. 
A)  I and III only. 
B)  I and II only. 
C)  I, II and III. 
D)  II and III only. 
E)  I, II, III, and IV.

Question 16

Generally accepted accounting principles require a U.S. corporation to disclose the following disaggregated information for each operating segment, except:

Accepted Answer

A)  Revenues from external customers. 
B)  Discontinued operations. 
C)  Cost of goods sold. 
D)  Depreciation expense. 
E)  Intersegment revenues. 
A)  Revenues from external customers. 
B)  Discontinued operations. 
C)  Cost of goods sold. 
D)  Depreciation expense. 
E)  Intersegment revenues.

Question 17

On February 23, 2011, Cleveland, Inc. paid property taxes of $300,000 for the calendar year 2011.
Prepare the journal entry for the payment of property taxes on February 23, 2011.

Accepted Answer

The answer of On February 23, 2011, Cleveland, Inc. paid...

Question 18

Which one of the following items must be disclosed for all reportable operating segments in the notes to financial statements? (I.) Revenue from external customers.
(II)) Total Segment Assets
(III.) Revenues from foreign customers, identified by country.

Accepted Answer

A)  I, II, and III 
B)  I and III only 
C)  II and III only 
D)  I and II only 
E)  There is no requirement of information to disclose for operating segments. 
A)  I, II, and III 
B)  I and III only 
C)  II and III only 
D)  I and II only 
E)  There is no requirement of information to disclose for operating segments.

Question 19

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands; Intersegment loans are receivables):   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 20

All of the following are required to be reported in interim financial statements for a material operating segment except:

Accepted Answer

A)  Segment assets. 
B)  Segment revenues from external customers. 
C)  Intersegment revenues. 
D)  Segment profit or loss. 
E)  Reconciliation of segment profit or loss to total income before taxes. 
A)  Segment assets. 
B)  Segment revenues from external customers. 
C)  Intersegment revenues. 
D)  Segment profit or loss. 
E)  Reconciliation of segment profit or loss to total income before taxes.

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

Which of the following are required to be disclosed in interim reports?

What is the appropriate treatment in an interim financial report for inventory that has cost below market value?

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

The Rivers Co. had four separate operating segments: What amount of revenues must be generated from one customer before that party must be identified as a major customer?

Which of the following is false with regard to accounting standards for segment reporting according to International Financial Reporting Standards (IFRS) and U.S. GAAP?

Which of the following statements is true regarding the reporting of revenues in an interim report?

Elektronix, Inc. has three operating segments with the following information: Which operating segments are separately reportable under the revenues test?

What is the major objective of segment reporting?

The hardware operating segment of Bloom Corporation has the following revenues for the year ended December 31, 2011: For purposes of the revenue test, what amount will be used as total revenues of the hardware operating segment?

Elektronix, Inc. has three operating segments with the following information: Which operating segments are separately reportable under the assets test?

Generally accepted accounting principles require a U.S. corporation to disclose the following disaggregated information for each operating segment, except:

On February 23, 2011, Cleveland, Inc. paid property taxes of $300,000 for the calendar year 2011. Prepare the journal entry for the payment of property taxes on February 23, 2011.

Which one of the following items must be disclosed for all reportable operating segments in the notes to financial statements? (I.) Revenue from external customers. (II)) Total Segment Assets (III.) Revenues from foreign customers, identified by country.

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands; Intersegment loans are receivables): What is the total amount of revenues in applying the revenue test?

All of the following are required to be reported in interim financial statements for a material operating segment except:

The Equity Method of Accounting for Investments

Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements - Intercompany Asset Transactions

Intercompany Debt, Consolidated Statement of Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

Accounting for State and Local Governments

Accounting for State and Local Governments

Accounting for Not-For-Profit Organizations

Accounting for Estates and Trusts

Filters

Exam 8: Segment and Interim Reporting

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

Which of the following are required to be disclosed in interim reports?

What is the appropriate treatment in an interim financial report for inventory that has cost below market value?

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

The Rivers Co. had four separate operating segments: What amount of revenues must be generated from one customer before that party must be identified as a major customer?

Which of the following is false with regard to accounting standards for segment reporting according to International Financial Reporting Standards (IFRS) and U.S. GAAP?

Which of the following statements is true regarding the reporting of revenues in an interim report?

Elektronix, Inc. has three operating segments with the following information: Which operating segments are separately reportable under the revenues test?

What is the major objective of segment reporting?

The hardware operating segment of Bloom Corporation has the following revenues for the year ended December 31, 2011: For purposes of the revenue test, what amount will be used as total revenues of the hardware operating segment?

Elektronix, Inc. has three operating segments with the following information: Which operating segments are separately reportable under the assets test?

Generally accepted accounting principles require a U.S. corporation to disclose the following disaggregated information for each operating segment, except:

On February 23, 2011, Cleveland, Inc. paid property taxes of $300,000 for the calendar year 2011. Prepare the journal entry for the payment of property taxes on February 23, 2011.

Which one of the following items must be disclosed for all reportable operating segments in the notes to financial statements? (I.) Revenue from external customers. (II)) Total Segment Assets (III.) Revenues from foreign customers, identified by country.

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands; Intersegment loans are receivables): What is the total amount of revenues in applying the revenue test?

All of the following are required to be reported in interim financial statements for a material operating segment except:

The Equity Method of Accounting for Investments

Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements - Intercompany Asset Transactions

Intercompany Debt, Consolidated Statement of Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

Accounting for State and Local Governments

Accounting for State and Local Governments

Accounting for Not-For-Profit Organizations

Accounting for Estates and Trusts

Filters