Question 1

How should revenues be recognized in interim periods?

Accepted Answer

A)  In the same way as they are recognized on an annual basis. 
B)  On the cash basis. 
C)  On an annualized basis. 
D)  On a seasonal basis. 
E)  There are no revenues recognized in interim periods. 
A)  In the same way as they are recognized on an annual basis. 
B)  On the cash basis. 
C)  On an annualized basis. 
D)  On a seasonal basis. 
E)  There are no revenues recognized in interim periods.

Question 2

What information does U.S.GAAP require to be disclosed for a major customer?

Accepted Answer

A)  The identity of the customer. 
B)  The operating segment reporting sales to the customer. 
C)  The geographic area of the customer. 
D)  The specific products or services purchased by the customer. 
E)  The length of time the customer has been a customer of the company. 
A)  The identity of the customer. 
B)  The operating segment reporting sales to the customer. 
C)  The geographic area of the customer. 
D)  The specific products or services purchased by the customer. 
E)  The length of time the customer has been a customer of the company.

Question 3

What is the operating profit or loss for the VCRs segment?

Accepted Answer

A)  $121,000 profit. 
B)  $121,000 loss. 
C)  $124,000 profit. 
D)  $124,000 loss. 
E)  $500,000 profit. 
A)  $121,000 profit. 
B)  $121,000 loss. 
C)  $124,000 profit. 
D)  $124,000 loss. 
E)  $500,000 profit.

Question 4

What is the minimum amount of revenue an operating segment must have to be considered a reportable segment?

Accepted Answer

A)  $12,000. 
B)  $15,000. 
C)  $15,500. 
D)  $16,200. 
E)  $16,700. 
A)  $12,000. 
B)  $15,000. 
C)  $15,500. 
D)  $16,200. 
E)  $16,700.

Question 5

What is the minimum amount of revenue that each of these segments must earn to be considered separately reportable?

Accepted Answer

A)  $2,730. 
B)  $2,660. 
C)  $2,800. 
D)  $2,940. 
E)  $2,520. 
A)  $2,730. 
B)  $2,660. 
C)  $2,800. 
D)  $2,940. 
E)  $2,520.

Question 6

How does a company measure income tax expense to be reported in an interim period?

Accepted Answer

Income tax expense related to interim pe

Question 7

Which of the following items of information are required to be included in interim reports for each operating segment? (I.) Revenues from external customers
(II.) Segment profit or loss
(III.) Reconciliation of segment profit or loss to the enterprise's total income before taxes
(IV.) Intersegment revenues

Accepted Answer

A)  I and III only. 
B)  I and II only. 
C)  I, II and III. 
D)  II and III only. 
E)  I, II, III, and IV. 
A)  I and III only. 
B)  I and II only. 
C)  I, II and III. 
D)  II and III only. 
E)  I, II, III, and IV.

Question 8

What is the minimum amount of profit or loss that each of these segments must earn to be considered separately reportable?

Accepted Answer

A)  $769,263. 
B)  $812,000. 
C)  $854,737. 
D)  $897,000. 
E)  $833,368. 
A)  $769,263. 
B)  $812,000. 
C)  $854,737. 
D)  $897,000. 
E)  $833,368.

Question 9

Assuming Baker makes the change in the first quarter of 2018 and that $400,000 net income is earned during the second quarter, how much is reported as net income for the second quarter of 2018?

Accepted Answer

A)  $400,000. 
B)  $405,200. 
C)  $427,950. 
D)  $894,850. 
E)  $905,200. 
A)  $400,000. 
B)  $405,200. 
C)  $427,950. 
D)  $894,850. 
E)  $905,200.

Question 10

What is the appropriate treatment in an interim financial report for a LIFO liquidation?

Accepted Answer

A)  The LIFO liquidation is always ignored for interim reporting. 
B)  The LIFO liquidation should always be reflected in gross profit on an interim income statement. 
C)  The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim balance sheet and the interim income statement. 
D)  The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim income statement but not the interim balance sheet. 
E)  The LIFO liquidation should only be reflected in gross profit on an interim income statement if it is determined that it will not be replaced by year-end. 
A)  The LIFO liquidation is always ignored for interim reporting. 
B)  The LIFO liquidation should always be reflected in gross profit on an interim income statement. 
C)  The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim balance sheet and the interim income statement. 
D)  The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim income statement but not the interim balance sheet. 
E)  The LIFO liquidation should only be reflected in gross profit on an interim income statement if it is determined that it will not be replaced by year-end.

Question 11

Combined segment revenues are calculated to be

Accepted Answer

A)  $29,400. 
B)  $25,200. 
C)  $26,600. 
D)  $28,000. 
E)  $27,300. 
A)  $29,400. 
B)  $25,200. 
C)  $26,600. 
D)  $28,000. 
E)  $27,300.

Question 12

Which of the following would be an acceptable grouping for a U.S.company to provide information by geographic area?

Accepted Answer

A)  United States, All Other Countries. 
B)  United States, Europe, Taiwan. 
C)  United States, Asia, Germany. 
D)  United States, Central America, Mexico, Germany. 
E)  South America, Spain, All Other Countries. 
A)  United States, All Other Countries. 
B)  United States, Europe, Taiwan. 
C)  United States, Asia, Germany. 
D)  United States, Central America, Mexico, Germany. 
E)  South America, Spain, All Other Countries.

Question 13

Betsy Kirkland, Inc.incurred a flood loss during the first quarter of 2018 that is deemed both unusual and not expected to recur again in the near future.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:

Accepted Answer

A)  Ignore the loss. 
B)  Record the loss in the first quarter as an unusual loss, net of income taxes. 
C)  Record one-fourth of the loss in the first quarter as an unusual loss, net of income taxes. 
D)  Ignore the loss in the first quarter, and record it in the annual statement only. 
E)  Record the loss in the first quarter, but not as an unusual loss, and disclose the loss in a separate note or in the income statement as a separate line item. 
A)  Ignore the loss. 
B)  Record the loss in the first quarter as an unusual loss, net of income taxes. 
C)  Record one-fourth of the loss in the first quarter as an unusual loss, net of income taxes. 
D)  Ignore the loss in the first quarter, and record it in the annual statement only. 
E)  Record the loss in the first quarter, but not as an unusual loss, and disclose the loss in a separate note or in the income statement as a separate line item.

Question 14

The Hardware operating segment of Bloom Corporation has the following revenues for the year ended December 31, 2018:   For purposes of the revenue test, what amount will be used as total revenues of the Hardware operating segment?

Accepted Answer

A)  $417,000. 
B)  $440,000. 
C)  $424,000. 
D)  $460,000. 
E)  $480,000. 
A)  $417,000. 
B)  $440,000. 
C)  $424,000. 
D)  $460,000. 
E)  $480,000.

Question 15

Burnside Corp.is organized into four operating segments.The following segment information was generated by the internal reporting system in 2018:
   Required:
1) What was the profit or loss of each of these segments?
2) Prepare the profit or loss test to determine which of these segments was separately reportable.

Accepted Answer

Requiremen

Question 16

What is the appropriate treatment in an interim financial report for variances arising from the use of a standard costing system?

Accepted Answer

A)  The variances are always ignored for interim reporting. 
B)  The variances should always be reflected in gross profit on an interim income statement. 
C)  The variances expected to be absorbed by year-end should not be reflected in the interim statement. 
D)  The variances should always be reflected in the interim income statement but not the interim balance sheet. 
E)  The variances should only be reflected in the interim balance sheet. 
A)  The variances are always ignored for interim reporting. 
B)  The variances should always be reflected in gross profit on an interim income statement. 
C)  The variances expected to be absorbed by year-end should not be reflected in the interim statement. 
D)  The variances should always be reflected in the interim income statement but not the interim balance sheet. 
E)  The variances should only be reflected in the interim balance sheet.

Question 17

According to the revenue test, which segment(s) are separately reportable?

Accepted Answer

A)  Mowers only. 
B)  Mowers and Edgers. 
C)  Mowers and Weedeaters. 
D)  Edgers and Weedeaters. 
E)  Mowers, Edgers, and Weedeaters. 
A)  Mowers only. 
B)  Mowers and Edgers. 
C)  Mowers and Weedeaters. 
D)  Edgers and Weedeaters. 
E)  Mowers, Edgers, and Weedeaters.

Question 18

Generally accepted accounting principles require a U.S.corporation to disclose the following disaggregated information for each operating segment, except:

Accepted Answer

A)  Revenues from external customers. 
B)  Unusual items. 
C)  Cost of goods sold. 
D)  Depreciation expense. 
E)  Intersegment revenues. 
A)  Revenues from external customers. 
B)  Unusual items. 
C)  Cost of goods sold. 
D)  Depreciation expense. 
E)  Intersegment revenues.

Question 19

For purposes of the profit or loss test, segment C's operating profit or (loss) is

Accepted Answer

A)  $1,300,000. 
B)  $ 700,000. 
C)  $2,000,000. 
D)  $ 200,000. 
E)  $ (200,000.) 
A)  $1,300,000. 
B)  $ 700,000. 
C)  $2,000,000. 
D)  $ 200,000. 
E)  $ (200,000.)

Question 20

How much income tax expense is recognized in the second quarter of 2018?

Accepted Answer

A)  $103,000. 
B)  $104,000. 
C)  $112,000. 
D)  $122,500. 
E)  $208,000. 
A)  $103,000. 
B)  $104,000. 
C)  $112,000. 
D)  $122,500. 
E)  $208,000.

Exam 8: Segment and Interim Reporting

How should revenues be recognized in interim periods?

What information does U.S.GAAP require to be disclosed for a major customer?

What is the operating profit or loss for the VCRs segment?

What is the minimum amount of revenue an operating segment must have to be considered a reportable segment?

What is the minimum amount of revenue that each of these segments must earn to be considered separately reportable?

How does a company measure income tax expense to be reported in an interim period?

What is the minimum amount of profit or loss that each of these segments must earn to be considered separately reportable?

Assuming Baker makes the change in the first quarter of 2018 and that $400,000 net income is earned during the second quarter, how much is reported as net income for the second quarter of 2018?

What is the appropriate treatment in an interim financial report for a LIFO liquidation?

Combined segment revenues are calculated to be

Which of the following would be an acceptable grouping for a U.S.company to provide information by geographic area?

The Hardware operating segment of Bloom Corporation has the following revenues for the year ended December 31, 2018: For purposes of the revenue test, what amount will be used as total revenues of the Hardware operating segment?

What is the appropriate treatment in an interim financial report for variances arising from the use of a standard costing system?

According to the revenue test, which segment(s) are separately reportable?

Generally accepted accounting principles require a U.S.corporation to disclose the following disaggregated information for each operating segment, except:

For purposes of the profit or loss test, segment C's operating profit or (loss) is

How much income tax expense is recognized in the second quarter of 2018?

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

A: Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

A: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

A: Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

A: Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

A: Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

Accounting for Estates and Trusts

A: Accounting for Estates and Trusts

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