1. Which of the following does the U.S. GAAP not consider to be an objective of segment...
a. It helps users better understand the enterprise’s performance.
b. It helps users better assess the enterprise’s prospects for future cash flows.
c. It helps users make more informed judgments about the enterprise as a whole.
d. It helps users make comparisons between a segment of one enterprise and a similar segment of another enterprise.
2. Under current U.S. accounting guidelines, which of the following items of information is Most Company not required to disclose, even if it were material in amount?
a. Revenues generated from sales of its consumer products line of goods.
b. Revenues generated by its Japanese subsidiary.
c. Revenues generated from export sales.
d. Revenues generated from sales to Walmart.
3. Which of the following operating segment disclosures is not required under current U.S. accounting guidelines?
b. Interest expense.
c. Intersegment sales.
d. Unusual items (extraordinary items and discontinued operations).
4. In determining whether a particular operating segment is of significant size to warrant disclosure, which of the following is true?
a. Three tests are applied, and all three must be met.
b. Four tests are applied, and only one must be met.
c. Three tests are applied, and only one must be met.
d. Four tests are applied, and all four must be met.
5. Which of the following statements is not true under U.S. GAAP?
a. Operating segments can be determined by looking at a company’s organization chart.
b. Companies must combine individual foreign countries into geographic areas to comply with the geographic area disclosure requirements.
c. Companies that define their operating segments by product lines must provide revenue and asset information for the domestic country, for all foreign countries in total, and for each material foreign country.
d. Companies must disclose total assets, investment in equity method affiliates, and total expenditures for long-lived assets by operating segment.
6. Which of the following is not necessarily true for an operating segment?
a. An operating segment earns revenues and incurs expenses.
b. The chief operating decision maker regularly reviews an operating segment to assess performance and make resource allocation decisions.
c. Discrete financial information generated by the internal accounting system is available for an operating segment.
d. An operating segment regularly generates a profit from its normal, ongoing operations.
7. Which of the following is a criterion for determining whether an operating segment is separately reportable?
a. Segment liabilities are 10 percent or more of consolidated liabilities.
b. Segment profit or loss is 10 percent or more of consolidated net income.
c. Segment assets are 10 percent or more of combined segment assets.
d. Segment revenues from external sales are 5 percent or more of combined segment revenues from external sales.
8. Which of the following statements concerning U.S. GAAP is true?
a. Does not require segment information to be reported in accordance with generally accepted accounting principles.
b. Does not require a reconciliation of segment assets to consolidated assets.
c. Requires geographic area information to be disclosed in interim financial statements.
d. Requires disclosure of a major customer’s identity.
9. Plume Company has a paper products operating segment. Which of the following items does it not have to report for this segment?
a. Interest expense.
b. Research and development expense.
c. Depreciation and amortization expense.
d. Interest income.
10. Which of the following items is required to be disclosed by geographic area?
a. Total assets.
b. Revenues from external customers.
c. Profit or loss.
d. Capital expenditures.
11. What is the minimum number of operating segments that must be separately reported?
b. Segments with at least 75 percent of revenues as measured by the revenue test.
c. At least 75 percent of the segments must be separately reported.
d. Segments with at least 75 percent of the revenues generated from outside parties.
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...
Fantastic news! We've located the answer you've been seeking!
Step by Step Answer: