Chapter 8: Segment and Interim Reporting
According to International Financial Reporting Standards (IFRS), all of the following are part of minimum components of interim financial reporting except:
A condensed statement of stockholders' equity.
Which of the following statements is false concerning the number of operating segments that should be disclosed?
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 of the following is reported for interim financial reports using the discrete approach?
Extraordinary gains
Which one of the following items is not required to be disclosed for each operating segment?
Factors used to allocate company-wide expenses.
The following items are required to be disclosed for each operating segment except:
Factors used to allocate company-wide pension expense
How should revenues be 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?
An operating segment's assets are 10 percent or more of combined segment assets.
Which of the following statements is true regarding the determination of operating segments in order to decide which segments will be separately reported?
An organizational unit can be an operating segment if all of its revenues or expenses results from transactions with other segments.
Which of the following is not true for an operating segment according to U.S. GAAP?
An organizational unit cannot be an operating segment if all of its operating transactions are only with other segments of the organization.
Which of the following is reported for interim financial reports using the integral approach?
Bonus expense
What are the two approaches that can be followed in preparing interim reports?
Discrete and integral
All of the following are required to be reported in interim financial statements for a material operating segment except.
Segment assets
Which of the following would be an acceptable grouping for a U.S. company to provide information by geographic area?
United States, All Other Countries
Which of the following is not correct regarding inventory procedures reported in an interim financial statement? A. LIFO liquidations expected to be replaced by the end of the year are accounted for in cost of goods sold at expected replacement cost rather than original LIFO cost.
FIFO is remeasured using the LIFO method in an interim financial statement
Which of the following is not a required disclosure in an interim financial report?
Gains on sales of major equipment
Which of the following is not a required disclosure in an interim financial report?
Gross profit
Which of the following are required to be disclosed in interim reports?
Gross revenues
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?
United States, Canada, Mexico, Germany
Which tests must a company use to determine which operating segments require separate disclosure?
revenue test, profit or loss test, and asset test
Which of the following statements is true?
In determining reportable segments, three tests are applied and only one must be met.
Which of the following operating segment disclosures is not required by U.S. GAAP?
Liabilities
How are extraordinary gains reported in a third quarter interim financial report?
Recognized in the third quarter
Betsy Kirkland, Inc. incurred a flood loss during the first quarter of 2013 that is deemed both unusual and infrequent. 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:
Record the loss in the first quarter, but not as an extraordinary loss, and disclose the loss in a separate note or in the income statement as a separate line item.
Vapor Corporation has a fan products operating segment. Which of the following items does Vapor not have to report for this segment?
Research and development expense.
Which of the following must be disclosed by a geographic segment according to U.S. GAAP?
Revenues from external customers
Generally accepted accounting principles require a U.S. corporation to disclose the following disaggregated information for each operating segment, except:
Cost of goods sold
Which of the following statements is true according to U.S. GAAP regarding segment or enterprise-wide disclosure?
Segment information does not have to be in accordance with generally accepted accounting principles.
What information does U.S. GAAP require to be disclosed for a major customer?
The operating segment reporting sales to the customer
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?
The segments may sell different products, but they have a similar production process.
