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ACC 401 Week 10 Quiz,
ACC 401 Week 10 Quiz Strayer
Chapter 14
Reporting for Segments and for Interim Financial Periods
1. A component of an enterprise that may earn revenues and incur expenses, and about which
management evaluates separate financial information in deciding how to allocate resources and
assess performance is a(n)
a. identifiable segment.
b. operating segment.
c. reportable segment.
d. industry segment.
2. An entity is permitted to aggregate operating segments if the segments are similar regarding the
a. nature of the production processes.
b. types or class of customers.
c. methods used to distribute products or provide services.
d. all of these.
3. Which of the following is not a segment asset of an operating segment?
a. Assets used jointly by more than one segment.
b. Assets directly associated with a segment.
c. Assets maintained for general corporate purposes.
d. Assets used exclusively by a segment.
4. SFAS No. 131 requires the disclosure of information on an enterprises operations in different
industries for
1. each annual period presented.
2. each interim period presented.
3. the current period only.
a. 1
b. 2
c. 3
d. both 1 and 2
5. Which of the following is not required to be disclosed by SFAS No. 131?
a. Information concerning the enterprises products.
b. Information related to an enterprises foreign operations.
c. Information related to an enterprises major suppliers.
d. All of the above are required disclosures.
6. To determine whether a substantial portion of a firms operations are explained by its segment
information, the combined revenue from sales to unaffiliated customers of all reportable segments
must constitute at least
a. 10% of the combined revenue of all operating segments.
b. 75% of the combined revenue of all operating segments.
c. 10% of the combined revenue from sales to unaffiliated customers of all operating segments.
d. 75% of the combined revenue from sales to unaffiliated customers of all operating segments.
7. A segment is considered to be significant if its
1. reported profit is at least 10% of the combined profit of all operating segments.
2. reported profit (loss) is at least 10% of the combined reported profit of all operating segments not
reporting a loss.
3. reported profit (loss) is at least 10% of the combined reported loss of all operating segments that
reported a loss.
a. 1
b. 2
c. 3
d. both 2 and 3
8. Which of the following disclosures is not required to be presented for a firms reportable segments?
a. Information about segment assets
d. $14,000.
13. Revenue test
(dollars in thousands)
Wholesale Retail Finance
Segment Segment Segment
Sales to unaffiliated customers $3,600 $1,500 $-0Sales intersegment 400 240 -0Loan interest income intersegment -0- 120 900
Loan interest income unaffiliated -0- 240 80
Income from equity method investees -0- 280 -0Determine the amount of revenue for each of the three segments that would be used to identify the
reportable industry segments in accordance with the revenues test specified by SFAS 131.
Wholesale Retail Finance
a. $3,600 $1,500 $ -0b. 4,000 1,740 -0c. 4,000 1,980 980
d. 4,000 2,380 980
14. Which of the following is not part of the information about foreign operations that is required to be
disclosed?
a. Revenues from external customers
b. Operating profit or loss, net income, or some other common measure of profitability
c. Capital expenditures
d. Long-lived assets
15. Eaton, Inc., discloses supplemental industry segment information. The following data are available
for 2011.
Traceable
Segment Sales operating expenses
A $420,000 $255,000
B 480,000 300,000
C 300,000 165,000
$1,200,000 $720,000
Additional 2011 expenses, not included above, are as follows:
b. As useful only if activity is evenly spread throughout the year so that estimates are unnecessary.
c. As reporting for a basic accounting period.
d. As reporting for an integral part of an annual period.
25. When a company issues interim financial statements, extraordinary items should be
a. allocated to the current and remaining interim periods of the current year on a pro rata basis.
b. deferred and included only in the annual income statement.
c. included in the determination of net income in the interim period in which they occur.
d. charged or credited directly to retained earnings so that comparisons of interim results of
operations will not be distorted.
26. If annual major repairs made in the first quarter and paid for in the second quarter clearly benefit
the entire year, when should they be expensed?
a. An allocated portion in each of the last three quarters
b. An allocated portion in each quarter of the year
c. In full in the first quarter
d. In full in the second quarter
27. During the second quarter of 2011, Dodge Company sold a piece of equipment at a gain of
$90,000. What portion of the gain should Dodge report in its income statement for the second quarter
of 2011?
a. $90,000
b. $45,000
c. $30,000
d. $ -028. In January 2011, Abel Company paid $200,000 in property taxes on its plant for the calendar year
2011. Also in January 2011, Abel estimated that its year-end bonuses to executives for 2011 would be
$800,000. What is the amount of expenses related to these two items that should be reflected in
Abels quarterly income statement for the three months ended June 30, 2011 (second quarter)?
a. $ -0b. $250,000
c. $ 50,000
d. $200,000
29. For interim financial reporting, a companys income tax provision for the second quarter of 2011
should be determined using the
a. statutory tax rate for 2011.
b. effective tax rate expected to be applicable for the full year of 2011 as estimated at the end of the
first quarter of 2011.
c. effective tax rate expected to be applicable for the full year of 2011 as estimated at the end of the
second quarter of 2011.
d. effective tax rate expected to be applicable for the second quarter of 2011.
30. Which of the following reporting practices is permissible for interim financial reporting?
a. Use of the gross profit method for interim inventory pricing.
b. Use of the direct costing method for determining manufacturing inventories.
c. Deferral of unplanned variances under a standard cost system until year-end.
d. Deferral of inventory market declines until year-end.
31. Which of the following statements most accurately describes interim period tax expense?
a. The best estimate of the annual tax rate times the ordinary income (loss) for the quarter.
b. The best estimate of the annual tax rate times income (loss) for the year to date less tax expense
(benefit) recognized in previous interim periods.
c. Average tax rate for each quarter, including the current quarter, times the current income (loss).
d. The previous years actual effective tax rate times the current quarters income.
32. The computation of a companys third quarter provision for income taxes should be based upon
earnings
a. for the quarter at an expected annual effective income tax rate.
b. for the quarter at the statutory rate.
c. to date at an expected annual effective income tax rate less prior quarters provisions.
to date at the statutory rate less prior quarters provisions.
33. Finney, a calendar year company, has the following income before income tax provision and
estimated effective annual income tax rates for the first three quarters of 2011:
Income Before Estimated Effective
Income Tax Annual Tax Rate
Quarter Provision at the End of Quarter
First $120,000 25%
Second 160,000 25%
Third 200,000 30%
Finneys income tax provision in its interim income statement for the third quarter should be
a. $74,000.
b. $60,000.
c. $50,000.
d. $144,000.
34. An inventory loss from a market price decline occurred in the first quarter. The loss was not
expected to be restored in the fiscal year. However, in the third quarter the inventory had a market
price recovery that exceeded the market decline that occurred in the first quarter. For interim
reporting, the dollar amount of net inventory should
a. decrease in the first quarter by the amount of the market price decline and increase in the third
quarter by the amount of the market price recovery.
b. decrease in the first quarter by the amount of the market price decline and increase in the third
quarter by the amount of the decrease in the first quarter.
c. not be affected in the first quarter and increase in the third quarter by the amount of the market
price recovery that exceeded the amount of the market price decline.
d. not be affected in either the first quarter or the third quarter.
35. Advertising costs may be accrued or deferred to provide an appropriate expense in each period
for
Interim Annual
Reporting Reporting
a. Yes No
b. Yes Yes
c. No No
d. No Yes