Exam 24: Full Disclosure in Financial Reporting

Which of the following best characterizes the difference between a financial forecast and a financial projection?

Use the following information for questions 64 through 69. The following data are provided: Additional information: Depreciation included in cost of goods sold and operating expenses is $610,000. On May 1, 2015, 30,000 shares of common stock were issued. The preferred stock is cumulative. The preferred dividends were not declared during 2015. -The book value per share of common stock at 12/31/15 is

A financial forecast per professional pronouncements presents to the best of the responsible party's knowledge and belief,

Mayo Corp. has estimated that total depreciation expense for the year ending December 31, 2015 will amount to $450,000, and that 2015 year-end bonuses to employees will total $900,000. In Mayo's interim income statement for the six months ended June 30, 2015, what is the total amount of expense relating to these two items that should be reported?

High-quality standards in an international environment include which of the following?

Use the following information for questions 64 through 69. The following data are provided: Additional information: Depreciation included in cost of goods sold and operating expenses is $610,000. On May 1, 2015, 30,000 shares of common stock were issued. The preferred stock is cumulative. The preferred dividends were not declared during 2015. -The inventory turnover for 2015 is

Segment reporting.A central issue in reporting on operating segments of a business enterprise is the determination of which segments are reportable. Instructions1. What are the tests to determine whether or not an operating segment is reportable?2. What is the test to determine if enough operating segments have been separately reported upon, and what is the guideline on the maximum number of operating segments to be shown?

The required approach for handling extraordinary items in interim reports is to

The profession requires disaggregated information in the following ways:

All of the following information about each operating segment must be reported except

The following methods of estimating inventory can be used at interim dates for inventory pricing. May they also be used at year end? Gross Profit Method Retail Inventory Method A) No No B) No Yes C) Yes No D) Yes Yes

Cash, short-term investments, and net receivables are the numerator for Acid-Test Ratio Current Ratio A) Yes No B) Yes Yes C) No No D) No Yes

The MD&A section must provide information about the effects of inflation and changing prices, if they are material to financial statement trends.

The SEC requires that companies report to it certain substantive information that is not found in their annual reports.

Interim reporting.Interim financial reporting has become an important topic in accounting. There has been considerable discussion as to the proper method of reflecting results of operations at interim dates. Accordingly, the Accounting Principles Board issued an opinion clarifying some aspects of interim financial reporting. Instructions (a) Discuss generally how revenue should be recognized at interim dates and specifically how revenue should be recognized for industries subject to large seasonal fluctuations in revenue and for long-term contracts using the percentage-of-completion method at annual reporting dates. (b) Discuss generally how product and period costs should be recognized at interim dates. Also discuss how inventory and cost of goods sold may be afforded special accounting treatment at interim dates. (c) Discuss how the provision for income taxes is computed and reflected in interim financial statements.

If Benjamin Company and Iris, Inc. are similar companies in every regard, exceptBenjamin Company uses IFRS while Iris, Inc. uses U.S. GAAP, which of the following istrue?

Identifiable assets for the 4 industry segments of Brittle Company are as follows: Candy \ 120,000 Stix \ 240,000 Chips \ 980,000 Gum \ 45,000 Brittle Company uses IFRS for its external financial reporting. Using only the identifiable assets test, which of the segments are reportable?

If 10 percent or more of company revenue is derived from a single customer, the company must disclose the total amount of revenue from each such customer by segment.

Benjamin Company uses IFRS, while Iris, Inc. uses U.S. GAAP, for their externalfinancial reporting. On January 16, 2015, both companies settled lawsuits relating toindustrial accidents that occurred in 2013. Benjamin Company paid $550,000 and Iris, Inc.paid $230,000. Assuming that no accrual had been previously made, what amount of lossshould be reported on the income statement for the year ended December 31, 2014 foreach company?

Unruh Corp. and its divisions are engaged solely in manufacturing operations. The following data (consistent with prior years' data) pertain to the industries in which operations were conducted for the year ended December 31, 2015. In its segment information for 2015, how many reportable segments does Unruh have? A) Three B) Four C) Five D) Six