Chapter 8: Multiple Choice HW

Which of the following is a criterion for determining whether an operating segment is separately reportable? A. Segment revenues from external sales are 5 percent or more of combined segment revenues from external sales. B. Segment profit or loss is 10 percent or more of consolidated net income. C. Segment liabilities are 10 percent or more of consolidated liabilities. D. Segment assets are 10 percent or more of combined segment assets.

D. Segment assets are 10 percent or more of combined segment assets.

For a U.S.-based company, which of the following would be an acceptable presentation of countries for providing information by geographic area? A. Canada, Germany, France, All Other Countries B. United States, Mexico, Japan, Spain, All Other Countries C. Europe, Asia, Africa D. United States, Canada and Mexico, Germany, Italy

B. United States, Mexico, Japan, Spain, All Other Countries

What information about revenues by geographic area should a company present? A. Disclose as a combined amount sales to unaffiliated customers and intra-entity sales between geographic areas. B. Disclose separately the amount of sales to unaffiliated customers and the amount of intra-entity sales between geographic areas. C. Disclose separately the amount of sales to unaffiliated customers but not the amount of intra-entity sales between geographic areas. D. No disclosure of revenues from foreign operations need be reported.

C. Disclose separately the amount of sales to unaffiliated customers but not the amount of intra-entity sales between geographic areas.

Which of the following statements concerning FASB ASC 280 is true? A. Does not require a reconciliation of segment assets to consolidated assets B. Requires disclosure of a major customer's identity C. Does not require segment information to be reported in accordance with generally accepted accounting principles D. Requires geographic area information to be disclosed in interim financial statements

C. Does not require segment information to be reported in accordance with generally accepted accounting principles

Which of the following operating segment disclosures is not required under current U.S. accounting guidelines? A. Intersegment sales. B. Unusual items. C. Liabilities. D. Interest expense.

C. Liabilities

Which of the following information items with regard to a major customer must be disclosed? A. The identity of the major customer B. The percentage of total sales derived from the major customer C. The operating segment making sales to the major customer D. The geographic area in which sales to the major customer are made

C. The operating segment making sales to the major customer

In determining whether a particular operating segment is of significant size to warrant disclosure, which of the following is true? A. Four tests are applied, and all four must be met. B. Four tests are applied, and only one must be met. C. Three tests are applied, and only one must be met. D. Three tests are applied, and all three must be met.

C. Three tests are applied, and only one must be met.

Which of the following is not necessarily true for an operating segment? A. The chief operating decision maker regularly reviews an operating segment to assess performance and make resource allocation decisions. B. Discrete financial information generated by the internal accounting system is available for an operating segment. C. An operating segment earns revenues and incurs expenses. D. An operating segment regularly generates a profit from its normal ongoing operations.

D. An operating segment regularly generates a profit from its normal ongoing operations.

Which of the following does U.S. GAAP not consider to be an objective of segment reporting? A. It helps users better assess the enterprise's prospects for future cash flows. B. It helps users make more informed judgments about the enterprise as a whole. C. It helps users better understand the enterprise's performance. D. It helps users make comparisons between a segment of one enterprise and a similar segment of another

D. It helps users make comparisons between a segment of one enterprise and a similar segment of another

Which of the following statements is true for a company that has managers responsible for product and service lines of business and managers responsible for geographic areas (matrix form of organization)? A. Under U.S. GAAP, the company must base operating segments on geographic areas. B. Under IFRS, the company must base operating segments on product and service lines of business. C. Under U.S. GAAP, the company may choose to define operating segments on the basis of either products and services or geographic areas. D. Under IFRS, the company must refer to the core principle of IFRS 8 to determine operating segments.

D. Under IFRS, the company must refer to the core principle of IFRS 8 to determine operating segments.

In considering interim financial reporting, how does current U.S. GAAP require that such reporting be viewed? A. As useful only if activity is evenly spread throughout the year, making estimates unnecessary B. As reporting for an integral part of an annual period C. As reporting for a basic accounting period D. As a special type of reporting that need not follow generally accepted accounting principles

B. As reporting for an integral part of an annual period

Which of the following items is required to be disclosed by geographic area? A. Total assets B. Profit or loss C. Capital expenditures D. Revenues from external customers

D. Revenues from external customers

Under current U.S. accounting guidelines, which of the following items of information is a company not required to disclose, even if it were material in amount? A. Revenues generated from export sales B. Revenues generated from sales to Walmart C. Revenues generated by its Japanese subsidiary D. Revenues generated from sales of its consumer products line of goods

A. Revenues generated from export sales

Which of the following statements is not true under U.S. GAAP? A. Operating segments can be determined by looking at a company's organization chart. B. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements. C. Companies that define their operating segments by product lines must provide revenue and asset information for the domestic country, for all foreign countries in total, and for each material foreign country. D. Companies must disclose total assets, investment in equity method affiliates, and total expenditures for long-lived assets by operating segment.

B. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements.

Plume Company has a paper products operating segment. Which of the following items does it not have to report for this segment? A. Interest income B. Research and development expense C. Depreciation and amortization expense D. Interest expense

B. Research and development expense