ACCT 442 FINAL Hoyle 8 quiz & homework

What is a "non-accelerated filer"? A company with fewer than five employees. A company having a public float of less than $75 million. A not-for-profit organization. A financial services organization.

A company having a public float of less than $75 million

What is the name of the SEC's online database of company filings? XBRL DRVA VAR EDGAR

EDGAR

Financial Reporting Releases (FRRs) and Staff Accounting Bulletins (SABs) are two pronouncements issues by the SEC. How do FRRs and SABs differ? FRRs are part of the 1934 Securities Exchange Act while SABs are not. SABs represent the official rules of the SEC while FRRs do not. SABs represent amendments to Regulation S-X, FRRs do not. FRRs represent requirements applicable to the form and content of financial statements filed with the SEC, SABs represent accounting interpretations followed by the SEC.

FRRs represent requirements applicable to the form and content of financial statements filed with the SEC, SABs represent accounting interpretations followed by the SEC

Assuming that all other criteria regarding the issuing organization and its "security" are met, which one of the following is not a "security" under the jurisdiction of the SEC? A trust certificate A municipal bond An oil drilling venture participation unit A limited partnership share

A municipal bond

The 1933 Securities Act provides for a 20-day waiting period between the filing and effective dates of the registration. During this waiting period the registrant is prohibited from engaging in which of these activities? Preparing any amendments to the registration statement. Accepting offers from potential investors to purchase securities being registered. Placing an advertisement indicating who will accept orders for the securities being registered. Issuing a prospectus in preliminary form.

Accepting offers from potential investors to purchase securities being registered.

c. Which one of the following items need not be filed with Form 10-Q? Matters reported on Form 8-K during the quarter. A description of legal proceedings. Income statements for the most recent quarter and for the equivalent quarter from the preceding year, and year-to-date data for both years. An audit report from an independent accountant.

An audit report from an independent accountant

The SEC's antifraud rules prohibit trading on the basis of inside information of a business corporation's stock by which of these? Officers. Officers and directors. Officers, directors, and beneficial holders of 10% of the corporation's stock. Anyone who bases his or her trading activities on inside information

Anyone who bases his or her trading activities on inside information

Which of the SEC's organizational units—divisions and principal offices—reviews the registration statements, annual reports, and proxy statements filed with the commission? Office of the Chief Accountant Division of Corporation Finance Division of Enforcement Division of the Comptroller

Division of Corporation Finance

Which of the following is not required for the registration statements filed under the Securities Act of 1933? Nature and history of the issuer's business Description of the securities being registered Estimate of the net proceeds and the expected uses of the proceeds Financial forecasts for the next two fiscal years

Financial forecasts for the next two fiscal years

Which of the following statements related to the SEC's periodic reporting requirements is false? Form 10-K, the annual report, is governed only by Regulation S-X, not Regulation S-K. Financial statements in Form 10-Q, the quarterly report, follow typical interim reporting principles contained in ASC Topic 270. Required Form 10-Q financial statements include balance sheets, statements of income and comprehensive income and cash flow statements. Form 10-Q financial statements may include fewer line items than those in Form 10-K.

Form 10-K, the annual report, is governed only by Regulation S-X, not Regulation S-K

A significant event affecting a company registered under the Securities and Exchange Act of 1934 should be reported on which of the following? Form 10-K Form S-1 Form 8-K Form 11-K

Form 8-K

Which of the following statements related to registration of new securities is false? Registration of new securities is governed by the Securities Act of 1933. Form S-1, the basic form for new security registration, is an elaborate checklist of rules to be followed and questions to be answered. A "private placement" may be exempt from detailed registration requirements. The independent public accountant reviews and audits information included in the registration statement.

Form S-1, the basic form for new security registration, is an elaborate checklist of rules to be followed and questions to be answered

Which of the following statements concerning U.S. GAAP is true? a) Does not require segment information to be reported in accordance with generally accepted accounting principles. b) Does not require a reconciliation of segment assets to consolidated assets. c) Requires geographic area information to be disclosed in interim financial statements. d) Requires disclosure of a major customer's identity.

a) 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) Liabilities. b) Interest expense. c) Intersegment sales. d) Unusual items (extraordinary items and discontinued operations).

a) Liabilities.

The role of the SEC regarding financial accounting for public companies is that the SEC does which of the following? Promulgates generally accepted accounting principles Regularly adopts requirements that confict with FASB pronouncements Makes regulations and rules pertaining to filings with the SEC but not to annual or quarterly reports to shareholders Makes regulations and rules pertaining more to disclosure outside the financial statements than to the setting of accounting principles

Makes regulations and rules pertaining more to disclosure outside the financial statements than to the setting of accounting principles

Medford Company has seven operating segments but only four (G,H,I, and J) are of significant size to warrant separate disclosure. As a whole, the segments generated revenues of $710,000 ($520,000 + $190,000) from outside parties. In addition, the segments had $260,000 in intersegment transfers ($220,000 + $40,000). Outside Sales Intersegment Sales G. . . . . . . . . $120,000 $ 80,000 H. . . . . . . . . 150,000 50,000 I. . . . . . . . . 160,000 20,000 J. . . . . . . . . 90,000 70,000 Totals. . . $520,000 $220,000 K. . . . . . . . $ 60,000 -0- L. . . . . . . . 70,000 $ 20,000 M. . . . . . . 60,000 20,000 Totals $190,000 $ 40,000 Which of the following statements is true? a) A sufficient number of segments are being reported because those segments have $740,000 in revenues of a total of $970,000 for the company as a whole. b) Not enough segments are being reported because those segments have $520,000 in outside sales of a total of $710,000 for the company as a whole. c) Not enough segments are being reported because those segments have $740,000 in revenues of a total of $970,000 for the company as a whole. d) A sufficient number of segments are being reported because those segments have $520,000 in outside sales of a total of $710,000 for the company as a whole.

b) Not enough segments are being reported because those segments have $520,000 in outside sales of a total of $710,000 for the company as a whole.

In March 2011, Archibald Company estimated its year-end executive bonuses to be $1,000,000. The executive bonus paid in 2010 was $950,000. What amount of bonus expense, if any, should Archibald recognize in determining net income for the first quarter of 2011? a) -0- b) $237,500 c) $250,000 d) $1,000,000

c) $250,000= (1K X 1/4)

Ming Company's $100,000 income for the quarter ended September 30 included the following after-tax items: $20,000 of a $40,000 extraordinary loss, realized on August 15; the other $20,000 was allocated to the fourth quarter of the year. A $16,000 cumulative effect loss resulting from a change in inventory valuation method made on September 1. $12,000 of the $48,000 annual proprty taxes paid on February. For the quarter ended September 30, the correct amount of net income that Ming should report is: a) $80,000 b) $88,000 c) $96,000 d) $116,000

c) $96,000

What information about revenues by geographic area should a company present? a) Disclose separately the amount of sales to unaffiliated customers and the amount of intra-entity sales between geographic areas. b) Disclose as a combined amount sales to unaffiliated customers and 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.

Quatro Corp. engages solely in manufacturing operations. The following data pertain to the operating segments for the current year: Operating Total Segment Revenues Profit Assets at 12/31 A. . . . . . . . . . . . . $10,000,000 $1,750,000 $20,000,000 B. . . . . . . . . . . . . 8,000,000 1,400,000 17,500,000 C. . . . . . . . . . . . . 6,000,000 1,200,000 12,500,000 D. . . . . . . . . . . . . 3,000,000 550,000 7,500,000 E. . . . . . . . . . . . . 4,250,000 675,000 7,000,000 F. . . . . . . . . . . . . 1,500,000 225,000 3,000,000 Total. . . . . . . . . $32,750,000 $5,800,000 $67,500,000 In its segment information for the current year, how many reportable segments does Quatro have? a) Three b) Four c) Five d) Six

c) Five

Which of the following is a criterion for determining whether an operating segment is separately reportable? a) Segment liabilities are 10% or more of consolidated liabilities. b) Segment profit or loss is 10% or more of consolidated net income. c) Segment assets are 10% or more of combined segment assets. d) Segment revenues from external sales are 5% or more of combined segment revenues from external sales.

c) Segment assets are 10% or more of combined segment assets.

Estilo Company has three operating segments with the following information: Paper Pencils Hats Sales to outsiders. . . . . . $8,000 $4,000 $6,000 Intersegment transfers 600 1,000 1,400 In addition, corporate headquarters generates revenues of $1,000. What is the minimum amount of revenue that each of these segments must generate to be considered separately reportable? a) $1,800 b) $1,900 c) $2,000 d) $2,100

d) $2,100

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

d) As reporting for an integral part of an annual period.

An audit committee of the board of directors consisting of outside directors should be objective in arbitrating disputes between a company's top management and the external auditor because audit committee members have no direct responsibility for the results of a company's operations. have only limited contacts with the external auditor. rely on senior management's opinions to resolve disputes with the external auditor. are required by the Securities Exchange Act of 1934 to oversee the progress of the annual external audit.

have no direct responsibility for the results of a company's operations.

These questions involve registration of new security issues with the SEC. Required a. In the registration and sale of new securities issues, the SEC provides a rating of the investment quality of the security. may not allow the registration to go effective if it judges the security's investment risk to be too great. allows all registrations to go effective if the issuing company's external accountant is satisfied that disclosures and representations are not misleading. makes no guarantees regarding the registration statement's material accuracy.

makes no guarantees regarding the registration statement's material accuracy.

Shareholders may ask or allow others to enter their vote at a shareholders meeting that they are unable to attend. The document furnished to shareholders to provide background information for their vote is a registration statement. proxy statement. 10-K report. prospectus.

proxy statement.

In cases of false or misleading disclosure in a registration statement that the SEC has allowed to become effective in conjunction with the public sale of securities, investors have the potential for legal recourse (for example, damage suits) against all of the following except the Securities and Exchange Commission. the issuing entity. the underwriter (managing broker) of the sale. the issuing entity's external accountant.

the Securities and Exchange Commission.

Carson Company has four separate operating segments: Apples Oranges Pears Peaches Sales to outsiders. . . . . $123,000 $81,000 $95,000 $77,000 Intersegment transfers. . 31,000 26,000 13,000 18,000 What revenue amount must one customer generate before it must be idenitified as a major customer? a) $37,600 b) $41,200 c) $46,400 d) $56,400

a) $37,600

Formation and meaningful utilization of an audit committee of the board of directors is required of publicly traded companies that are subject to the rules of which of the following? Securities and Exchange Commission. Financial Accounting Standards Board. New York Stock Exchange. National Association of Securities Dealers.

New York Stock Exchange.

Which of the following acts gives the SEC the ultimate power to suspend trading in a security, delist a security, and prevent brokers and dealers from working in the securities market? Securities Investors Protection Act of 1934 Securities Act of 1934 Securities Exchange Act of 1934 Investment Company Act of 1940

Securities Exchange Act of 1934

The SEC was established in 1934 to help regulate the United States securities market. Which of the following statements is true concerning the SEC? The SEC prohibits the sale of speculative securities. Registration with the SEC guarantees the accuracy of the registrant's prospectus. The SEC's initial influence and authority has diminished in recent years as stock exchanges have become more organized and better able to police themselves. The SEC regulates only securities offered for public sale.

The SEC regulates only securities offered for public sale.

Which of the following items is not required to be reported in interim financial statements for each material operating segment? a) Revenues from external customers. b) Intersegment revenues. c) Segment assets. d) Segment profit or loss.

c) Segment assets.

Which of the following information items with regard to a major customer must be disclosed? a) The identity of the customer. b) The percentage of total sales derived from the major customer. c) The operating segment making the sale. d) The geographic area from which the sale was made.

c) The operating segment making the sale.

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

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