Question

Multiple choices
1. 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. United States, Canada and Mexico, Germany, Italy.
c. Europe, Asia, Africa.
d. Canada, Germany, France, All Other Countries.

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

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

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

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

6. 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 disclosed, but no attempt should be made to reflect the effect of past seasonality on financial statements.
c. The seasonal nature should be reflected by providing pro forma financial statements for the current interim period.
d. No attempt should be made to reflect seasonality in interim financial statements.

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

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

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

10. 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?
a. Under U.S. GAAP, the company would report property tax expense of $100,000 in the second quarter 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 $33,333 in each of the second, third, and fourth quarters of the year.
d. Under IFRS, the company would report property tax expense of $25,000 in the first quarter of the year.

11. In March 2011, Archibald Company estimated its year-end executive bonuses to be $1,000,000. The executive bonus paid in 2010 was $950,000. What amount of bonus expense, if any, should Archibald recognize in determining net income for the first quarter of 2011?
a. –0–.
b. $237,500.
c. $250,000.
d. $1,000,000.

Use the following information for problem 12
On March 15, Calloway, Inc., paid property taxes of $480,000 for the calendar year.

12. How much of this expense should Calloway’s income statement reflect for the quarter ending March 31?
a. –0–.
b. $40,000.
c. $120,000.
d. $480,000.



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  • CreatedOctober 04, 2014
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