Advanced Financial Ch. 8

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

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 assets are 10 percent or more of combined segment assets. c. Segment profit or loss is 10 percent or more of consolidated net income. d. Segment liabilities are 10 percent or more of consolidated liabilities.

d. Segment assets. If there have been a material change from the last annual report, total assets, but not individual assets, for each operating segment must be disclosed.

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

d. Gross revenues.

Which of the following items must be disclosed in interim reports? a. Total assets. b. Cash flow from operating activities. c. Total liabilities. d. Gross revenues.

c. Liabilities

Which of the following operating segment disclosures is not required under current U.S. accounting guidelines? a. Interest expense. b. Intersegment sales. c. Liabilities. d. Unusual items and extraordinary items.

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

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

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

Which of the following statements is not true under U.S. GAAP? a. Companies must disclose total assets, investment in equity method affiliates, and total expenditures for long-lived assets by operating segment. b. 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. c. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements. d. Operating segments can be determined by looking at a company's organization chart.

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

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 refer to the core principle of IFRS 8 to determine operating segments. c. Under IFRS, the company must base operating segments on product and service lines of business. d. Under U.S. GAAP, the company may choose to define operating segments on the basis of either products and services or geographic areas.

c. Revenues generated from export sales.

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

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

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

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

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 better understand the enterprise's performance. c. It helps users make more informed judgments about the enterprise as a whole. d. It helps users make comparisons between a segment of one enterprise and a similar segment of another enterprise.

d. The operating segment making the sale.

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

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

According to U.S. GAAP, which of the following is an acceptable grouping of countries for providing information by geographic area? a. United States, Mexico, Japan, Spain, All Other Countries. b. Europe, Asia, Africa. c. United States, Canada and Mexico, Germany, Italy. d. Canada, Germany, France, All Other Countries.

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

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. An operating segment regularly generates a profit from its normal, ongoing operations. c. An operating segment earns revenues and incurs expenses. d. Discrete financial information generated by the internal accounting system is available for an operating segment.

a. Revenues from external customers.

Which of the following items is required to be disclosed by geographic area? a. Revenues from external customers. b. Total assets. c. Profit or loss. d. Capital expenditures.

a. The seasonal nature should be disclosed, and the interim report should be supplemented with a report on the 12-month period ended at the interim date for both the current and preceding years.

How should material seasonal variations in revenue be reflected in interim financial statements? a. The seasonal nature should be disclosed, and the interim report should be supplemented with a report on the 12-month period ended at the interim date for both the current and preceding years. b. The seasonal nature should be reflected by providing pro forma financial statements for the current interim period. c. No attempt should be made to reflect seasonality in interim financial statements. d. The seasonal nature should be disclosed, but no attempt should be made to reflect the effect of past seasonality on financial statements.

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

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

b. Recognized in the second quarter.

For interim financial reporting, an extraordinary gain occurring in the second quarter should be a. Recognized ratably over the last three quarters. b. Recognized in the second quarter. c. Recognized ratably over all four quarters, with the first quarter being restated. d. Disclosed by footnote only in the second quarter.

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

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 only one must be met. b. Three tests are applied, and only one must be met. c. Three tests are applied, and all three must be met. d. Four tests are applied, and all four must be met.

b. Under IFRS, the company would report property tax expense of $100,000 in the second quarter of the year.

Niceville Company pays property taxes of $100,000 in the second quarter of the year. Which of the following statements is true with respect to the recognition of property tax expense in interim financial statements? rev: 03_26_2016_QC_CS-45896 a. Under U.S. GAAP, the company would report property tax expense of $33,333 in each of the second, third, and fourth quarters of the year. b. Under IFRS, the company would report property tax expense of $100,000 in the second quarter of the year. c. Under U.S. GAAP, the company would report property tax expense of $100,000 in the second quarter of the year. d. Under IFRS, the company would report property tax expense of $25,000 in the first quarter of the year.

c. Research and development expense.

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. Interest expense. c. Research and development expense. d. Depreciation and amortization expense.