Exam 24: Full Disclosure in Financial Reporting

Fina Corp. had the following transactions during the quarter ended March 31, 2015: Loss from hurricane damage \ 420,000 Payment of fire insurance premium for calendar year 2015 700,000 What amount should be included in Fina's income statement for the quarter endedMarch 31, 2015?

In presenting segment information, which of the following items must be reconciled to the entity's consolidated financial statements? Operating Identifiable Revenues Profit (Loss) Assets A) Yes Yes Yes B) No Yes Yes C) Yes No Yes D) Yes Yes No

Perez Company's net accounts receivable were $800,000 at December 31, 2014 and $880,000 at December 31, 2015. Net cash sales for 2015 were $520,000. The accounts receivable turnover for 2015 was 8.0. What were Perez's total net sales for 2015?

An example of an inventory accounting policy that should be disclosed in a Summary of Significant Accounting Policies is the

When should an average amount be used for the numerator or denominator?

Computation of selected ratios.The following data is given: InstructionsCompute the following ratios: (a) Acid-test ratio at 12/31/15(b) Accounts receivable turnover in 2015(c) Inventory turnover in 2015(d) Profit margin on sales in 2015(e) Return on common stock equity in 2015(f) Book value per share of common stock at 12/31/15

IFRS is important for U.S. investors for all of the following reasons except

In order to make adequate disclosure of related party transactions, companies should report the legal form, rather than the economic substance, of these transactions.

Which of the following subsequent events (post-balance-sheet events) would require adjustment of the accounts before issuance of the financial statements?

An operating segment is a reportable segment if

Challenges to convergence of IFRS with U.S. GAAP include all of the following except

Which of the following post-balance-sheet events would generally require disclosure, but no adjustment of the financial statements?

Presented below is information related to Tolbert Company. Current Assets Cash \ 4,000 Short-term investments 75,000 Accounts receivable 61,000 Inventories 110,000 Prepaid expenses 30,000 Total current assets \2 80,000 Total current liabilities are $100,000. What is the acid-test ratio?

In January 2015, Post, Inc. estimated that its year-end bonus to executives would be $840,000 for 2015. The actual amount paid for the year-end bonus for 2014 was $770,000. The estimate for 2015 is subject to year-end adjustment. What amount, if any, of expense should be reflected in Post's quarterly income statement for the three months ended March 31, 2015?

Operating profits and losses for the 4 industry segments of Brittle Company are asfollows: Candy (\ 590,000) Stix \ 20,000 Chips \ 85,000 Gum \ 9,000 Brittle Company uses IFRS for its external financial reporting. Using only the operating profits (loss) test, which of the segments are reportable?

Events that occur after the December 31, 2015 balance sheet date (but before the balance sheet is issued) and provide additional evidence about conditions that existed at the balance sheet date and affect the realizability of accounts receivable should be

Inventory and cost of goods sold at interim dates.Discuss how inventory and cost of goods sold may be afforded special accounting treatment at interim dates.

Segment reporting.Finney Company's condensed income statement is presented below: Instructions (a) Prepare a schedule showing the amounts distributed to each segment. (b) Based only on the above information, which segments must be reported and why?

The MD&A section of a company's annual report is to cover the following three items:

Companies should report accounting transactions as they occur, and expense recognition should not change with the period of time covered under the integral approach.