CHAPTER 10 - OPERATING SEGMENT

c. The total external revenue of all reportable segments is 75% or more of the entity's external revenue.

Which statement is true concerning the 75% overall size test for reportable segments? a. The total external and internal revenue of all reportable segments is 75% or more of the entity's external revenue. b. The total external revenue of all reportable segments is 75% or more of the entity's external and internal revenue c. The total external revenue of all reportable segments is 75% or more of the entity's external revenue. d. The total internal revenue of all reportable segments is 75% or more of the entity's internal revenue

Provide information about a company's operating, investing, and financing activities.

An objective of the statement of cash flows is to: Disclose the change in working capital during this period Disclose changes during the period in all assets and equity accounts Provide information about a company's operating, investing, and financing activities. None of these answer choices are correct.

d. Information about intersegment revenue

Entity-wide disclosures include all, except a. Information about products b. Information about geographical areas c. Information about major customers d. Information about intersegment revenue

b. Revenue test, asset test and profit or loss test

For segment reporting purposes, which test must be applied to determine if a component is a reportable operating segment? a. Revenue test and asset test b. Revenue test, asset test and profit or loss test c. Revenue test, asset test and expense test d. Revenue test, asset test and cash flow test

b. The consolidated financial statements only

If a financial report contains both the consolidated financial statements of a parent and the parent's separate financial statements, segment information is required in a. The separate financial statements only b. The consolidated financial statements only c. Both the separate statements d. Neither the separate statements

Can be determined by appropriately adding or deducting from net income those items in the income statement that do not affect cash

In preparing a statement of cash flows, cash flows from operating activities: Are determined as the difference between revenues and expenses Are always equal to accrual income accounting Can be determined by appropriately adding or deducting from net income those items in the income statement that do not affect cash Can be determined by appropriately adding or deducting from net income those items in the income statement that do affect cash.

Current assets and current liabilities

Operating activities are associated with any changes in which of the following? Current assets only Current liabilities only Current assets and current liabilities Non-current assets and non-current liabilities

b. Ten segments

What is the practical limit to the number of reportable operating segments? a. Five segments b. Ten segments c. Six segments d. Four segments

Issuing shares of common stock

Which of the following activities is an example of financing activity Issuing shares of common stock Selling goods on account Purchase of equipment Purchase of inventory

d. Refers to a function of allocating resources to the operating segments and assessing their performance

The term chief operating decision maker a. Refers to a manager with a specific title. b. Must be by title in the financial reporting for segments. c. Must be described in the disclosures for the financial reporting for segments. d. Refers to a function of allocating resources to the operating segments and assessing their performance

d. The segments have dissimilar characteristics

Two or more operating segments may be aggregated into a single operating segment if all of the following conditions are satisfied, except a. The segments have similar characteristics. b. The segments share a majority of the nature of product or service, nature of production process, class of customer, method of product distribution and regulatory environment. c. The aggregation is consistent with the core principle of segment reporting. d. The segments have dissimilar characteristics

b. Allocated expense

An entity must disclose all of the following about each reportable segment if the amounts are used by the chief operating decision maker, except a. Depreciation expense b. Allocated expense c. Interest expense d. Income tax expense

d. General corporate expenses

An entity shall disclose for each reportable segment all of the following specified amounts included in the measure of profit or loss, except a. Depreciation and amortization b. The entity's interest in the profit or loss of associate. c. Income tax expense d. General corporate expenses

d. Gain on disposal of investment

An entity shall disclose for each reportable segment all of the following specified amounts included in the measure of profit or loss, except a. Revenue from external customers b. Revenue from internal customers c. Interest revenue d. Gain on disposal of investment

c. Factors used to identify the reportable segments and types of products and services

An entity shall disclose which of the following general information? a. Factors used to identify the reportable segments b. Types of products and services c. Factors used to identify the reportable segments and types of products and services d. Names of the board of directors

d. All of these characterize an operating segment.

An operating segment is a component of an entity a. That engages in business activities from which it may earn revenue and incur expenses. b. Whose operating results are regularly reviewed by the entity's chief operating decision maker. c. For which discrete information is available. d. All of these characterize an operating segment.

c. Segment liabilities are 10% or more of the combined liabilities of all segments.

An operating segment is considered reportable when any of the following conditions is met, except a. Segment revenue is 10% or more of the combined revenue of all of the entity's segments. b. Segment assets are 10% or more of the combined assets of all segments. c. Segment liabilities are 10% or more of the combined liabilities of all segments. d. Segment's profit or loss is 10% or more of the combined profit of all segments that did not incur a loss

Operating activities

Cash advances and loans made by a financial institutions are usually classified as: Operating activities Investing activities Financing activities Component of cash and cash equivalents

Classified as operating activities

Cash flows arising from trading securities are: Classified as operating activities Classified as investing activities Classified as financing activities Not reported in the statement of cash flows

Classified as financing activities

Cash receipts from issuing shares are: Classified as operating activities Classified as investing activities Classified as financing activities Not reported in the statement of cash flows

The consolidated financial statements only

If a financial report contains both the consolidated financial statements of a parent and the parent's separate financial statements, segment information is required in: The separate financial statements only The consolidated financial statements only Both the separate and consolidated financial statements Neither the separate nor the consolidated financial statements

Transactions involving an entity's nontraded liabilities and equity

In broad sense, financing activities include cash flows from: Operating assets transactions Nonoperating assets transactions Transactions involving an entity's nontraded liabilities and equity Repayments of advances and loans

b. The title of the chief operating decision maker.

In financial reporting for operating segments, an entity shall disclose all of the following, except a. Type of product and service from which each reportable segment derives revenue. b. The title of the chief operating decision maker. c. Factors used to identify the reportable segments. d. The basis of measurement of segment profit or loss and segment assets

d. The segment assets are 20% or more of the combined assets of all operating segments.

Which quantitative threshold is not a requirement in qualifying a reportable segment? a. The segment revenue, both external and internal, is 10% or more of the combined external and internal revenue of all operating segments. b. The segment profit or loss is 10% or more of the greater between the combined profit of profitable segments and combined loss of unprofitable segments. c. The segment assets are 10% or more of the combined assets of all operating segments. d. The segment assets are 20% or more of the combined assets of all operating segments.

d. The chief internal auditor would generally qualify as chief operating decision maker

Which statement is not true with respect to a chief operating decision maker? a. The term chief operating decision maker identifies a function and not necessarily a manager with a specific title. b. In some cases, the chief operating decision maker could be the chief operating officer. c. The board of directors acting collectively could qualify as the chief operating decision maker. d. The chief internal auditor would generally qualify as chief operating decision maker

d. All of these statements are true about major customer disclosures

Which statement is true about major customer disclosure? a. A major customer is defined as one providing revenue which amounts to 10% or more of combined external revenue of all operating segments. b. The identities of major customers need not be disclosed. c. The entity shall disclose the total amount of revenue from major customers. d. All of these statements are true about major customer disclosures

d. All of these are required be disclosed

What are the disclosures required in relation to operating segments? a. General information about the operating segment. b. Information about segment profit or loss, including specified revenue and expenses included in profit or loss, segment assets and segment liabilities. c. Reconciliations of total segment revenue, total segment profit or loss, total segment assets and total segment liabilities to the corresponding amounts in the entity's financial statements. d. All of these are required be disclosed

The investing activities section

What section of a cash flow statement shows the cash paid on new equipment during the previous accounting period? The investing activities section The operating activities section The financing activities section The statement of cash flows does not provide this kind of information

a. Publicly traded

Which entity is required to report on business segments? a. Publicly traded b. Not for profit c. Joint venture d. Nonpublic

Publicly traded entities

Which of the following entities are required to report on business segments? Publicly traded entities Non-public entities Joint ventures All entities

d. The fact that transactions with a particular external customer constitute at least 10% of the total entity revenue

Which of the following is, a required enterprise-wide disclosure regarding external customers? a. The identity of any external customer considered to be major by management b. The identity of any external customer providing 10% or more of a particular operating segment revenue c. Information on major customers is not required in segment reporting d. The fact that transactions with a particular external customer constitute at least 10% of the total entity revenue

All of the above

Which of the following statements best defines the term "operating segment"? It is a component of an entity for which discrete financial information is available It is a component of equity whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. It is a component of equity that is engaged in business activities from which it may earn revenues and incur expenses A and C All of the above

Statement of Cash Flows

A report that provides information about the entity's cash inflows and outflows during the period Notes to Financial Statements Statement of Cash Flows Statement of Financial Position Statement of Comprehensive Income

Operating activities, investing activities, and financing activities

A statement of cash flows is composed of these types of activities namely: Operating activities, Investing activities, and issuing activities Operating activities, investing activities, and financing activities Investing activities, supplying activities, and receiving activities Operating activities, disposing activities, and financing activities

d. Cost of goods sold

An entity must disclose all of the following about each reportable segment if the amounts are used by the chief operating decision maker, except a. Unusual items b. Income tax expense c. Intersegment revenue d. Cost of goods sold

Both the separate financial statements of an entity and the consolidated financial statements of a group

Segment reporting is required to: Separate financial statements of an entity only Consolidated financial statements of a group only Both the separate financial statements of an entity and the consolidated financial statements of a group Neither the separate financial statements of an entity nor the consolidated financial statements of a group.

c. The total number of major customers of all segments to the total number of major customers of the entity

Segment reporting requires that an entity should provide reconciliations of segment information. Which is not a required reconciliation? a. The total of the reportable segments' revenue to the entity revenue b. The total of the reportable segments' profit or loss to the entity profit or loss before tax expense and discontinued operations c. The total number of major customers of all segments to the total number of major customers of the entity d. The total of the reportable segments' assets to the entity assets

c. Both the separate financial statements of an entity and the' consolidated financial statements of a group

Segment reporting shall apply to a. Separate financial statements of an entity only. b. Consolidated financial statements of a group only. c. Both the separate financial statements of an entity and the' consolidated financial statements of a group d. Neither the separate financial statements of an entity nor the consolidated financial statements of a group

c. Management approach

The approach used in segment reporting is known as a. Segment approach b. Revenue approach c. Management approach d. Enterprise approach

Future contracts, forward contracts, option contracts, and swap contracts that require cash payments

The following examples are under operating activities, except: Cash receipts from sale of goods and services Future contracts, forward contracts, option contracts, and swap contracts that require cash payments Royalties, rental, fees, commissions, and other revenues Payment to suppliers

Cash

The statement of cash flows is solely concerned with _______ Cash Cash inflows Cash outflows Assets

b. May be considered reportable and separately disclosed if management believes that information about the segment would be useful to the users of the financial statements

Operating segments that do not meet any of the quantitative thresholds a. Cannot be considered reportable. b. May be considered reportable and separately disclosed if management believes that information about the segment would be useful to the users of the financial statements. c. May be considered reportable and separately disclosed if the information is for internal use. d. May be considered reportable and separately disclosed if this is the practice within the economic environment in which the entity operates.

Three

Querro Inc, is a Philippine publicly listed computer hardware dealership company. Based on the decision of the Board of Directors, the entity is managed and controlled through three divisions, namely the "computer spare parts division", the "computer workshop division," and the "computer sales division." Both the sales division and the workshop division deal with external customers and handle orders of both walk-in customers as well as long-term customers who have purchased computers through earlier sales through the dealership. The entity's spare parts division, however, only supplies spare parts to its workshop division and does not cater to the demands of any outside customers. In other words, if outside customers desire to purchase spare parts directly from the spare parts division of Querro Inc. they cannot do so unless their computers are serviced by the workshop division of Querro Inc., and the workshop division purchases spare parts from its spare parts division for the purposes of undertaking repairs of computers they have been contracted to undertake repair work for. For the purposes of IFRS 8 Operating Segments, how many operating segments should Querro Inc. report segmental disclosures for? 6 points One Two Three None

The cash receipts and cash disbursements of an entity during a period

The primary purpose of a statement of cash flows is to provide relevant information about which of the following? An entity's ability to generate positive net cash flows An entity's ability to meet cash operating needs The cash receipts and cash disbursements of an entity during a period Difference between net income and associated cash receipts and disbursements

III only

The statement of cash flows provides answers to all the following questions except: I. Where did the cash come from during the period? II. What was the cash used for during the period? III. What is the impact of inflation on the cash balance at the end of the year? IV. What was the change in the cash balance during the period? I and II. III only I, II and IV. I, II, III and IV.