Question 1

A company reports the following in relation to its latest financial year:
$$\begin{array} { l r } 
\text { Current assets } & \$ 175 \
\text { Non-current assets } & 300 \
\text { Current liabilities } & 50 \
\text { Non-current liabilities } & 250
\end{array}$$ Writing a cheque for $25 to pay off some long-term debentures payable means that the current ratio will be:

Accepted Answer

A)  7.0 times 
B)  3.0 times 
C)  unchanged 
D)  5.5 times

Question 2

Which of the following items need not be shown when reporting primary segment information for a business?

Accepted Answer

A)  Segment results 
B)  Segment revenues 
C)  Segment receivables 
D)  Segment liabilities

Question 3

When evaluating whether to calculate diluted earnings per share (EPS),a company issuing convertible notes should consider:

Accepted Answer

A)  the time weighting factor 
B)  if the notes potentially convert to ordinary shares 
C)  if conversion of the notes is likely to increase earnings, or decrease losses, per share 
D)  both B and C must be considered

Question 4

'Value added' can best be defined as:

Accepted Answer

A)  sales revenue less the cost of all bought-in materials and services and all wages and salaries 
B)  sales revenue less the cost of all bought-in materials and services 
C)  sales revenue less the cost of all bought-in materials and services, all wages and salaries and interest expense 
D)  sales revenue less the cost of all bought-in materials and services, all wages and salaries, interest expense and income tax expense

Question 5

Reporting by segments of a business is believed to have a number of advantages.Which of the following is not likely to be such an advantage?

Accepted Answer

A)  Allowing better assessment of expected returns from and risks of investing 
B)  Preventing management from hiding failures in decision making 
C)  Increasing the net profit of a business 
D)  Improving investors' decision making

Exam 18: Financial Reporting: Segment Reporting, value Added Statements, highlights Statements and Future-Oriented Financial Information

Which of the following items need not be shown when reporting primary segment information for a business?

When evaluating whether to calculate diluted earnings per share (EPS) ,a company issuing convertible notes should consider:

'Value added' can best be defined as:

Reporting by segments of a business is believed to have a number of advantages.Which of the following is not likely to be such an advantage?