Ch. 8,11,12

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?

Automotive, Electrical, and Lawn Equipment

Which of the following is not one of the steps to prepare IFRS statements for the first time? A) Determine applicable IFRS accounting policies based on standards in force on the reporting date. B) Recognize assets and liabilities required to be recognized under IFRS that were not recognized under previous GAAP. C) Derecognize assets and liabilities previously recognized that are not allowed to be recognized under IFRS. D) Reclassify items previously classified in a different manner from what is acceptable under IFRS. E) Comply with most disclosure and presentation requirements.

comply with most disclosure and presentation requirements

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 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.

I, II, III, and IV

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? 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.

IFRS and U.S. GAAP both require disclosure of intangible assets attributable to geographic segments

Which of the following is reported for interim financial reports using the integral approach? A) Bonus expense. B) Gross profit. C) Cash basis accounting. D) Current market value. E) Segment level management compensation.

bonus expense

Which of the following is not a required disclosure in an interim financial report? A) Sales or gross revenues. B) Provision for income taxes. C) Cash flow information. D) Changes in accounting principles. E) Seasonal revenues and expenses.

cash flow information

Which of the following statements is true? A) In determining reportable segments, two tests are applied and both must be met. B) In determining reportable segments, three tests are applied and all three must be met. C) In determining reportable segments, two tests are applied and only one must be met. D) In determining reportable segments, three tests are applied and only one must be met. E) In determining reportable segments, at least 80% of the revenues from external customers must be reported.

in determining reportable segments, three tests are applied and only one must be met

Which of the following is a pronouncement originally issued by the IASC and is not a pronouncement originally issued by the IASB? A) Business Combinations. B) First-Time Adoption of IFRS. C) Financial Instruments: Disclosures. D) Interim Financial Reporting. E) Operating Segments.

interim financial reporting

Bugs, Inc., a wholly owned subsidiary of the U.S.-based company, Pillows Ltd., was notified of a loss contingency with an estimated cost ranging between $50,000 and $150,000. Bugs, Inc. hired an expert appraiser who assessed that all possible dollar amounts of liability in this range are equally likely. Management of Bugs, Inc. has estimated that there is a 60 percent chance that this contingency will result in an actual loss. According to U.S. GAAP, what is the amount recognized by Bugs, Inc. as a provision for loss contingency? A) No amount will be recorded but an amount will be disclosed in the notes to the financial statements. B) $50,000 C) $60,000 D) $100,000 E) $150,000

no amount will be recorded but an amount will be disclosed in the notes to the financial statements

A foreign subsidiary of a U.S.-based company has been notified of a loss contingency with an estimated cost ranging between $220,000 and $250,000 which is probable of resulting in an actual loss. Each dollar amount within this range of cost is equally likely of being the actual outcome. According to U.S. GAAP, what is the amount recognized as a provision for loss contingency? A) No amount will be recorded but an amount will be disclosed in the notes to the financial statements. B) $110,000 C) $220,000 D) $235,000 E) $250,000

$220,000

Which of the following are issued by the SEC, as needed, to supplement Regulation S-X and Regulation S-K? A) SABs. B) ASRs. C) FRRs. D) ARBs. E) SRBs.

FRRs

What international organization currently issues IFRS? A) IASB. B) IASC. C) IOSCO. D) FASB. E) EU.

IASB

Which of the following is the organization that governs the IASB? A) IASC. B) IOSCO. C) UNESCO. D) IFRS Foundation. E) IAS Service.

IFRS foundation

Which one of the following forms is used when no other form is prescribed? A) S-4. B) S-3. C) S-11. D) S-8. E) S-1.

S-1

What is Form 10-K? A) A quarterly report filed with the SEC. B) An annual report filed with the SEC. C) A semiannual report filed with the SEC. D) A form filed with the SEC before the company issues stock for the first time. E) A form filed with the SEC before issuing stocks to acquire another company.

an annual report filed with the SEC

Which of the following is a correct statement with regard to differences between IFRS and U.S. GAAP? A) Reporting a bank overdraft that is an integral part of a cash management policy is a recognition difference. B) Reporting LIFO inventory is a presentation difference. C) Reporting past service cost for defined benefit pension plans is a measurement difference. D) Reporting convertible debt is a recognition difference. E) Reporting development costs is a classification difference.

reporting past service cost for defined benefit pension plans is a measurement difference

Which of the following must be disclosed by a geographic segment according U.S. GAAP? A) Operating profit or loss. B) Gross profit. C) Total assets. D) Revenues from external customers. E) Revenues from internal customers.

revenues from external customers

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? 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.

the change in stockholders' equity

Which of the following is not one of the criteria management should consider in determining whether business activities and environments of an operating segment are similar? A) The geographical location of the operations. B) The nature of the production process. C) The distribution methods. D) The nature of the regulatory environment, if applicable. E) The type or class of customer.

the geographical location of the operations

The most relevant factor in determining the purpose of financial reporting is: A) The nature of the country's financing system B) The country's current economic conditions C) The ability to control inflation D) A strong equity financing system which is more conservative, minimal disclosures, and tight tax laws. E) A weak equity financing system which is less conservative, extensive disclosures and loose tax laws.

the nature of the country's financing system

For companies that provide quarterly reports, how is the fourth quarter reported?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 fourth-quarter report is not required

Convergence of accounting standards would not occur by: A) FASB adopting an existing IASB standard. B) IASB adopting an existing FASB standard. C) IASB issuing a new standard. D) IASB and FASB jointly developing a new standard. E) IASB and FASB each issuing a similar but not identical standard.

IASB issuing a new standard

Which of the following statements is false regarding a country's legal system? A) The two major types of legal systems are common law and codified Roman law. B) Common law originated in the Roman jus civile. C) Code law countries tend to have more statutes governing a wider range of human activity. D) Accounting law is rather general in code law countries. E) A nongovernmental organization is more likely to develop in a common law country than in a code law country.

common law originated in the Roman jus civile

IFRS for SMEs are primarily designed to meet the needs of: A) Small Manufacturing Enterprises. B) Governmental entities. C) Companies whose shares of stock are not publicly traded. D) Not-for-profit organizations. E) Special Model Entities.

companies whose shares of stock are not publicly traded

The types of differences that exist between IFRS and U.S. GAAP would not generally include: A) Presentation differences. B) Measurement differences. C) Disclosure differences. D) Comparability differences. E) Classification differences.

comparability differences

Generally accepted accounting principles require a U.S. corporation to disclose the following disaggregated information for each operating segment, except: A) Revenues from external customers. B) Unusual items. C) Cost of goods sold. D) Depreciation expense. E) Intersegment revenues.

cost of goods sold

Which of the following is not a factor influencing a country's financial reporting practices? A) Providers of financing. B) Inflation. C) Legal system. D) Gross National Product. E) Political and economic ties.

gross national product

Which of the following is not a required disclosure in an interim financial report? A) Net income. B) Earnings per share. C) Gross profit. D) Significant changes in estimates or provisions for income taxes. E) Disposal of a component, net of income taxes.

gross profit

A U.S. company has many foreign subsidiaries and is converting its consolidated financial statements from U.S. GAAP to IFRS. Which of the following items is not one of the likely accounting issues to resolve for the conversion? A) Measuring impairment. B) Classifying preferred shares of stock. C) Sale and leaseback gain recognition. D) Measuring salaries expense. E) Prior service cost recognition for defined benefit plans.

measuring salaries expense

All of the following are true regarding IASB members except: A) IASB shall comprise 16 members, and up to 3 of those members may be part-time. B) Full-time members must sever employment relationships with former employers. C) Full-time members are not allowed to hold any position giving rise to perceived economic incentives that might call their independence into question. D) Part-time members must sever employment relationships with former employers. E) Primary qualifications for IASB membership are professional competence and practical experience.

part-time members must server employment relationships with former employers

Vapor Corporation has a fan products operating segment. With respect to the following, which is Vapor not required to report for this segment? A) Depreciation expense. B) Amortization expense. C) Research and development expense. D) Interest expense. E) Interest income.

research and development expense

A foreign subsidiary of a U.S.-based company has been notified of a loss contingency with an estimated cost ranging between $220,000 and $250,000 which is probable of resulting in an actual loss. Each dollar amount within this range of cost is equally likely of being the actual outcome. According to IFRS, what is the amount recognized as a provision for loss contingency? A) No amount will be recorded but an amount will be disclosed in the notes to the financial statements. B) $110,000 C) $220,000 D) $235,000 E) $250,000

$235,000

Coulanger Corp. identified four operating segments: A, B, C, and D. Segment A met the revenue test for identifying reportable segments while Segment C met the revenue test, profit or loss test, and asset test. Segment B and Segment D did not meet any of these tests. Which of these segments must be disclosed separately?

A and C

Which of the following is not a likely step to furthering convergence of FASB and IFRS? A) FASB adopting an existing IASB Standard. B) IASB adopting an existing FASB standard. C) FASB and IASB issuing an identical standard. D) FASB working with IASB to develop a new standard. E) Realizing that identical standards, rather than similar standards, is not realistic.

FASB and IASB issuing an identical standard

Which of the following is not true for an operating segment according to U.S. GAAP? A) Discrete financial information generated by the internal accounting system is available. B) The segment recognizes revenues and incurs expenses. C) The segment is regularly reviewed by a chief decision maker to assess performance decisions. D) The segment is regularly reviewed by a chief decision maker to make resource allocations. E) An organizational unit cannot be an operating segment if all of its operating transactions are only with other segments of the organization.

an organizational unit cannot be an operating segment if all of its operating transactions are only with other segments of the organization

A wraparound filing: A) May be used by large companies to sell securities over a period of two years without re-filing with the SEC. B) Is a simplified registration procedure for securities to be issued by small companies. C) Allows a company to simplify its periodic filing by attaching its annual report to Form 10-K. D) Is a filing completed using the SEC's electronic filing system. E) May remain in effect for a period of one to five years.

allows a company to simplify its periodic filing by attaching its annual report to Form 10-k

According to authoritative accounting literature, which of the following are required to be disclosed in interim reports? A) Cash flows from investing activities. B) Change in cash. C) Total current liabilities. D) Total assets. E) Gross revenues.

gross revenues

Which of the following is not a problem caused by diverse accounting practices across countries? A) Preparation of consolidated financial statements. B) Gaining access to foreign capital markets. C) Lack of comparability of financial statements between companies in the same country. D) Cost and expertise required of accounting staff who prepare consolidated financial statements. E) Need for a company to maintain multiple sets of accounting records.

lack of comparability of financial statements between companies in the same country

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

revenue test, profit or loss test, and asset test

IFRS for SMEs differ from full IFRS in all of the following ways except: A) IFRS for SMEs require significantly fewer disclosures. B) Interim period reports need not be prepared when following IFRS for SMEs. C) Recognizing and measuring assets are simplified when following IFRS for SMEs. D) Segment reporting must be provided when following IFRS for SMEs. E) IFRS for SMEs do not require earnings per share to be reported.

segment reporting must be provided when following IFRS for SMEs

Which one of the following is not a division of the SEC? A) The Division of Corporation Finance. B) The Division of Investment Management. C) The Division of Compliance Information. D) The Division of Enforcement. E) The Division of Trading and Markets.

the division of compliance information

Which of the following is not an example of IFRS simplified for SMEs? A) All borrowing costs are expensed as incurred. B) All development costs are expensed as incurred. C) Goodwill is amortized over its useful life. D) There is a choice between using the cost model and the revaluation model for property, plant, and equipment. E) Actuarial gains and losses for defined benefit plans are recognized immediately.

there is a choice between using the cost model and the revaluation model for property, plant, and equipment

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

there is no loss to report

All of the following are influences on the development of a country's financial reporting practices except: A) The country's legal system. B) The country's political system. C) The taxation system. D) The country's cultural system. E) The country's level of inflation.

the country's cultural system

Which of the following statements is true according to U.S. GAAP regarding operating segment disclosure? A) The measurement of segment profit and loss disclosure need not be similar to the measurement provided to the chief operating decision maker. B) Segment information does not have to be in accordance with generally accepted accounting principles. C) Disclosure of a major customer's identity is required. D) Geographic area information must be disclosed in interim financial statements. E) Immaterial items must be disclosed.

segment information does not have to be in accordance with generally accepted accounting principles

In countries of Latin America: A) Accounting practice currently emphasizes political colonialism. B) Accounting standards previously emphasized accounting highly inflationary economies. C) Banks are the primary source of financing for companies. D) Accounting standards focus are based on recent market economy reforms. E) Accounting information is prepared to meet the needs of governmental planners.

accounting standards previously emphasized accounting highly inflationary economies

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

the operating segment reporting sales to the customer

Which one of the following Federal laws was enacted in 1935? A) The Securities Act. B) The Securities Exchange Act. C) The Trust Indenture Act. D) The Investment Company Act. E) The Public Utility Holding Company Act.

the public utility holding company act

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

the variances expected to be absorbed by year-end should not be reflected in the interim statement

When defining a reportable segment, which of the following conditions would be sufficient to allow a company to combine two operating segments for purposes of testing? A) The products sold by each segment are produced in the same plant. B) Both segments have several customers in common. C) The segments may sell different products, but they have a similar economic environment and similar business activities. D) Both segments are required to adhere to U.S. Department of Labor regulations regarding immigration laws. E) Both segments are owned by the same parent company.

the segments may sell different products, but they have a similar economic environment and similar business activities

Bugs, Inc., a wholly owned subsidiary of the U.S.-based company, Pillows Ltd., was notified of a loss contingency with an estimated cost ranging between $50,000 and $150,000. Bugs, Inc. hired an expert appraiser who assessed that all possible dollar amounts of liability in this range are equally likely. Management of Bugs, Inc. has estimated that there is a 60 percent chance that this contingency will result in an actual loss. In the conversion from U.S. GAAP financial statements to IFRS financial statements, what is the amount of adjustment needed to adjust for the difference in accounting for a provision for loss contingency? A) $0 B) $50,000 C) $100,000 D) $150,000 E) $200,000

$100,000

Which of the following would be an acceptable grouping for a U.S. company to provide information by geographic area? A) United States, All Other Countries. B) United States, Europe, Taiwan. C) United States, Asia, Germany. D) United States, Central America, Mexico, Germany. E) South America, Spain, All Other Countries.

United States, All Other Countries

Which of the following costs require similar treatment to Property Tax Expense in an interim financial report? 1) Annual major repairs. 2) Advertising expense. 3) Bonus expense, if estimable. 4) Quantity discounts based on annual sales. A) 1 and 2 B) 1, 2, and 3 C) 1, 2, and 4 D) 2, 3, and 4 E) 1, 2, 3, and 4

1, 2, 3, and 4

Barrel of Oats (BOA), a U.S. company, was acquired by an international company and BOA has a transition date of January 1, 2018 for first-time adoption of IFRS. BOA has a new cereal brand that is ready to be marketed but the company has not yet received copyright approval for the brand's logo. All costs for development of the copyright were expensed prior to IFRS January 1, 2018. BOA and its new international parent both have December 31 year-end accounting years. What should BOA do to prepare financial statements for the first time in accordance with IFRS? A) Debit development expense and credit copyright for the year ended December 31, 2018. B) Debit copyright and credit copyright expense at January 1, 2018. C) Debit copyright and credit research and development expense for the year ended December 31, 2017. D) Debit copyright and credit stockholders' equity at January 1, 2018. E) Debit stockholders' equity and credit research and development expense at January 1, 2018.

debit copyright and credit stockholders' equity at January 1, 2018

Which of the following is not one of the steps to prepare IFRS statements for the first time? A) Determine applicable IFRS accounting policies based on standards in force on the reporting date. B) Recognize assets and liabilities required to be recognized under IFRS that were not recognized under previous GAAP. C) Derecognize assets and liabilities previously recognized that are not allowed to be recognized under IFRS. D) Reclassify items previously classified in a different manner from what is acceptable under IFRS. E) Comply with most disclosure and presentation requirements.

determine applicable IFRS accounting policies based on the standards in effect on the opening balance sheet date

How should seasonal revenues be reported in an interim report? A) Disclose the seasonal nature of business operations, and include a pro forma report for the next 12-month period. B) Disclose the seasonal nature of business operations but do not include other reports supplemental to the interim report. C) Disclose the seasonal nature of business operations, and consider a report for the 12-month period ended at the interim date to supplement the interim report. D) The financial statements should be adjusted to reflect the assumption that no seasonal revenues could be recognized. E) Seasonal revenues have no particular reporting requirement.

disclose the seasonal nature of business operations, and consider a report for the 12-month period ended at the interim date to supplement the interim report

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

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

Which one of the following items is not required to be disclosed for each operating segment? A) Factors used to identify operating segments. B) Products and services from which each segment derives its revenues. C) Revenues from external customers. D) Factors used to allocate company-wide expenses. E) Revenues from transactions with other operating segments.

factors used to allocate company-wide expenses

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

factors used to allocate company-wide pension expense

Foreign companies whose stock is listed on a U.S. stock exchange and using foreign GAAP other than IFRS must file their annual report with the SEC on: A) Form 8-A. B) Form 10-A. C) Form 16-K. D) Form 20-F. E) Form 20-K.

form 20-F

A U.S. company has many foreign subsidiaries and wants to convert its consolidated financial statements from U.S. GAAP to IFRS. Which of the following items is not one of the likely accounting issues to resolve for the opening IFRS balance sheet? A) Inventory valuation. B) Capitalizing development costs. C) Bank overdrafts that are integral to cash management. D) Goodwill calculation from acquisition of a subsidiary. E) Liability for restructuring charges.

goodwill calculation from acquisition of a subsidiary

Of the following IFRS, which was the most recently issued? A) First-Time Adoption of IFRS B) Leases C) Revenue from Contracts with Customers D) Insurance Contracts E) Financial Instruments: Disclosures

leases

Which of the following operating segment disclosures is not required by U.S. GAAP? A) Interest expense. B) Intersegment sales. C) Unusual items. D) Depletion. E) Liabilities.

liabilities

Which statement is correct as it relates to diverse accounting practices across countries? A) Gaining access to foreign capital markets is relatively easy and inexpensive once the financial statements are converted to the local currency of the country where the financing is desired. B) U.S. GAAP is acceptable worldwide wherever IFRS has not been adopted. C) To have stock listed on a U.S. stock exchange, all financial statements submitted to the SEC must be prepared either using U.S. GAAP or using IFRS. D) Stock analysts specializing in industry coverage can compare financial statements regardless of various national or international accounting standards used by companies being compared. E) Translating financial statements of various currencies into one common currency for consolidation purposes does not resolve the problem of diversity of accounting practices across countries.

translating financial statements of various currencies into one common currency for consolidation purposes does not resolve the problem of diversity of accounting practices across countries

Which of the following is not a problem caused by diversity in accounting practices across countries? A) Comparing companies in the same industry that are headquartered in different countries. B) Translating foreign currency balances into U.S. dollars. C) Converting local GAAP financial statements into U.S. GAAP for consolidation purposes. D) Maintaining separate accounting records in both the local and U.S. GAAP. E) Identifying and retaining personnel who are competent to prepare financial statements in both international and domestic accounting standards.

translating foreign currency balances into U.S. dollars

When must Form 8-K be filed with the SEC? A) Within forty-five days of the end of any quarter other than the fourth quarter of the fiscal year. B) Within ninety days of the end of the fiscal year. C) Within fifteen days of the occurrence of certain significant events. D) Within sixty days of the end of the fiscal year. E) When a relatively small company intends to issue securities.

within fifteen days of the occurrence of certain significant events

Which of the following is reported for interim financial reports using the discrete approach? A) Income tax expense. B) Seasonal items. C) Change in accounting principle. D) Property tax expense. E) Discontinued operations.

discontinued operations

What are the two approaches that can be followed in preparing interim reports? A) Indiscrete and terminal. B) Discrete and terminal. C) Metric and integral. D) Discrete and integral. E) Discrete and metric.

discrete and integral

A company is preparing financial statements using IFRS for the first time for the year ended December 31, 2018. The "transition date" for reporting is A) December 31, 2018. B) December 31, 2017. C) January 1, 2017. D) January 1, 2018. E) January 1, 2019.

January 1, 2018

Which one of the following registration statement forms is used by large issuers that already have at least $75 million voting stock held by non-affiliates? A) S-11. B) S-3. C) S-8. D) S-4. E) S-1.

S-3

The most recent FASB-IASB convergence projects include: A) Leases, Research and Development, Revenue Recognition, and Fair Value Measurement. B) Leases, Revenue Recognition, Fair Value Measurement, and Joint Ventures. C) Insurance Contracts, Post-Employment Benefits, Income Taxes and Impairment D) Insurance Contracts, Income Taxes, Leases, and Revenue Recognition. E) Revenue Recognition, Leases, Insurance Contracts, and Income Taxes.

leases, revenue recognition, fair value measurement, and joint ventures

Which one of the following is not a background or qualification requirement for full-time IASB members? A) Professional competence. B) Attain 10 years of auditing experience. C) Practical experience. D) Cease holding positions which might call into question their independence. E) Sever relationship with former employers.

attain 10 years of auditing experience

How should revenues be recognized in interim periods? A) In the same way as they are recognized on an annual basis. B) On the cash basis. C) On an annualized basis. D) On a seasonal basis. E) There are no revenues recognized in interim periods.

in the same way as they are recognized on an annual basis

Which of the following is a criterion for determining whether an operating segment is separately reportable? A) An operating segment's assets are 10 percent or more of combined segment assets. B) An operating segment's assets are 10 percent or more of consolidated assets. C) An operating segment's assets are 10 percent or more of combined segment liabilities. D) An operating segment's assets are 10 percent or more of consolidated liabilities. E) An operating segment's assets are 10 percent or more of corporate assets.

an operating segment's assets are 10 percent or more of combined segment assets

The goals of the SEC include all except which one of the following? A) Prohibiting the dissemination of materially misstated information. B) Controlling the number of companies whose stock is listed on major stock exchanges. C) Regulating the operation of securities markets. D) Ensuring that full and fair information is disclosed to all investors before the securities of a company may be bought and sold. E) Preventing the misuse of information especially by inside parties.

controlling the number of companies whose stock is listed on major stock exchanges

In the United States, foreign companies filing annual reports with the SEC that are not prepared in accordance with U.S. GAAP must: A) Present financial statements that comply with international GAAP. B) Conform with U.S. GAAP or present a reconciliation to U.S. GAAP. C) Have a demonstrated need for capital to be used for operations in the U.S. D) Use the U.S. dollar as their reporting currency. E) Either use IFRS, or otherwise use foreign GAAP with a reconciliation to U.S. GAAP.

either use IFRS, or otherwise use foreign GAAP with a reconciliation to U.S. GAAP

Regulation S-K: A) Controls the listing of securities by stock exchanges. B) Establishes requirements for nonfinancial information to be filed with the SEC. C) Prescribes the form of financial statements to be filed with the SEC. D) Describes the internal controls a publicly traded company must maintain. E) Prescribes the financial disclosure information that must be included in filings with the SEC.

establishes requirements for nonfinancial information to be filed with the SEC

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: 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.

ignore the loss

Which of the following is not an authoritative pronouncement of International Financial Reporting Standards (IFRSs)? A) International Financial Reporting Standards issued by the IASB B) International Accounting Standards issued by the IASC and adopted by the IASB C) Interpretations issued by the International Financial Reporting Interpretations Committee (IFRICs) D) International Accounting Principles E) Interpretations issued by the Standing Interpretations Committee (SICs) and adopted by the IASB

international accounting principles

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

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

Regulation S-X specifies: A) Requirements for the nonfinancial information to be filed with the SEC. B) Which form a company must file to register new securities. C) That the financial statements included in a company's annual report must be audited. D) The form and content of financial statements to be filed with the SEC. E) The internal controls a publicly traded company must maintain.

the form and content of financial statements to be filed with the SEC

Which of the following is not true about IFRS? A) The IASB does not have the ability to enforce proper usage of IFRS. B) IFRS is available to any organization or nation that wishes to use those standards. C) IFRS is a comprehensive set of financial reporting standards. D) IFRS includes only pronouncements issued by the IASB. E) IFRS are considered as generally accepted accounting principles.

IFRS includes only pronouncements issued by the IASB

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. 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.

I an II only

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

an organizational unit can be an operating segment even if all of its revenues or expenses result from transactions with other segments

A company that generates reports by both geographic region and product line must consider additional criteria in identifying operating segments when there are multiple sets of reports. Which of the following statement(s) is correct? (I.) An operating segment has a segment manager who is directly accountable to the chief operating decision maker for its financial performance. (II.) If more than one set of organizational units exists, each organizational unit is considered an operating segment even if there is only one set for which segment managers are held responsible. (III.) If segment managers exist for two or more overlapping sets of organizational units, the nature of the business activities must be considered. A) I, II, and III. B) I and III only. C) I and II only. D) II and III only. E) None of the above.

I and III only

Which of the following is not correct regarding inventory procedures reported in an interim financial statement? A) LIFO liquidations a company expects to be replaced by year-end should be recorded in cost of goods sold, quantified at expected replacement cost rather than original LIFO cost. B) Lower-of-cost-or-net realizable value adjustments are not made for the interim period if they are expected to reverse by the end of the year. C) Variances in a standard costing system are reported at the end of the interim period unless they are expected to be absorbed by year-end. D) FIFO is remeasured using the LIFO method in an interim financial statement. E) LIFO liquidations not expected to be replaced by the end of the year are reflected in cost of goods sold at original LIFO cost.

LIFO is remeasured using the LIFO method in an interim financial statement

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? 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.

United States, Canada, Mexico, Germany

According to International Financial Reporting Standards (IFRS), all of the following are part of minimum components of interim financial reporting except: A) A condensed statement of cash flows. B) A condensed statement of financial position. C) A condensed statement of accumulated pension liabilities. D) A condensed statement of net income and comprehensive income. E) Accrual of income tax expense at the end of each interim period.

a condensed statement of accumulated pension liabilities

All of the following are ways a country may use IFRS except: A) A country may require foreign companies listed on its domestic stock exchange to use IFRS. B) A country may permit companies listed on its domestic stock exchange to use IFRS. C) A country may permit foreign companies listed on a foreign stock exchange to use foreign GAAP. D) A country may require companies listed on its domestic stock exchange to use IFRS in preparing consolidated financial statements. E) A country may adopt IFRS as its national GAAP.

a country may permit foreign companies listed on a foreign stock exchange to use foreign GAAP

All of the following are simplified principles for recognizing and measuring assets, liabilities, income, and expenses for SMEs under IFRS except: A) Borrowing costs are expensed as incurred. B) All development costs are expensed as incurred. C) Actuarial gains and losses for defined benefit plans may be either recognized immediately or deferred and amortized. D) Goodwill is amortized over its useful life. E) The cost model for property, plant, and equipment must be used.

actuarial gains and losses for defined benefit plans may be either recognized immediately or deferred and amortized

The prospectus part of a registration contains all except which of the following? A) Financial statements for the issuing company audited by an independent CPA along with appropriate supplementary data. B) An explanation of the intended use of the proceeds to be generated by the sale of the new securities. C) A description of the risks associated with the securities. D) A description of the business and the properties owned by the company. E) Additional data concerning expenses of issuance.

additional data concerning expenses of issuance

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

adjust financial statements for each prior period presented to reflect the effects of the new principle in those reported periods

Which of the following is not a way for a country to use IFRS? A) Require foreign companies listed on that country's stock exchange to use IFRS for consolidated financial statements. B) Allow foreign companies listed on that country's stock exchange to use IFRS. C) Permit its domestic companies listed on that country's stock exchange to use IFRS. D) Adopt IFRS as that country's national GAAP. E) All of these answer choices are correct.

all of these answer choices are correct

How should discontinued operations be reported in an interim report? A) Include in the gain or loss section of the interim report and include the tax with all other income tax. B) Include as discontinued operations, net of tax, if the component of the business is classified as held-for-sale or is discontinued in the interim period. C) Include net of the tax estimated specifically for the discontinued operations. D) Include with other operations in the interim period but include the amount net of its specific tax. E) Include with other operations in interim periods until the annual financial statement is prepared.

include as discontinued operations, net of tax, if the component of the business is classified as held-for-sale or is discontinued in the interim period

The FASB-IASB convergence project on leases resulted in the following: A) Lease accounting will be the same under IFRS and under U.S. GAAP in that lessors and lessees will capitalize all leases as finance leases and treat them as such in the measurement of income. B) Lessor and lessee accounting will be the same under IFRS and under U.S. GAAP in that lessors will capitalize all leases and lessees will capitalize some leases as finance leases but treat others as operating leases. C) Lease accounting will differ in that under IFRS lessees will capitalize some leases as finance leases and others as operating leases, while under U.S. GAAP lessees will capitalize all leases as finance leases but treat them as traditional operating leases in the measurement of net income. D) Lease accounting will be similar under IFRS and U.S. GAAP for lessees but will differ for lessors in their treatment of the measurement of net income. E) Lease accounting will differ for lessees in that, under IFRS, all leases will be treated as finance leases both on the balance sheet and in the measurement of net income, and under U.S. GAAP lessees will capitalize operating leases on the balance sheet similar to finance leases but will treat them as traditional operating leases in the measurement of income.

lease accounting will differ for lessees in that, under IFRS, all leases will be treated as finance leases both on the balance sheet and in the measurement of net income, and under U.S. GAAP lessees will capitalize operating leases on the balance sheet similar to finance leases but will treat them as traditional operating leases in the measurement of income

When measuring assets and liabilities recognized on the opening balance sheet in accordance with first-time adoption of IFRS, the reporting company must: A) Use its current valuation method and disclose the method in the notes to the financial statements. B) Retrospectively apply applicable IASB standards to each asset and liability reported on the opening balance sheet. C) Prospectively apply applicable IASB standards to each asset and liability reported on the opening balance sheet. D) Recognize the difference in measurement, and disclose it in the notes to the financial statements as a change in accounting estimate. E) Retrospectively apply applicable IASB standards to each asset and liability reported on the opening balance sheet and recognize the amount of change in the income statement.

retrospectively apply applicable IASB standards to each asset and liability reported on the opening balance sheet

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

revenues should be recognized in interim periods in the same way as they are on an annual basis

Which of the following securities offerings is not exempt from registration prior to their sale? A) Securities issued to a company's board of directors. B) Securities issued by governments. C) Securities issued by banks. D) Securities issued by savings and loan associations. E) Offerings of no more than $1 million made to any number of investors within a 12-month period.

securities issued to a company's board of directors

All of the following are required to be reported in interim financial statements with respect to material operating segments, except: 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.

segment assets

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

the loss should be recorded in the interim period in which net realizable value drops below cost if the loss is considered permanent