Chapter9ed14

Chapter9ed14 - Chapter 14 Test Bank SEGMENT AND INTERIM...

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Chapter 14 Test Bank SEGMENT AND INTERIM FINANCIAL REPORTING Multiple Choice Questions LO1 1. Similar operating segments may be combined if the segments have similar economic characteristics. Which one of the following is a similar economic characteristic under SFAS 131 ? a. management team b. tax reporting law sections c. the distribution method for products or services d. the expected rates of return and risk for the segment’s productive assets LO1 2. Which of the following conditions would not indicate that two business segments should be classified as a single operating segment? a. They have similar amounts of intersegment revenues or expenses. b. They have a similar distribution of products. c. They have similar production processes. d. They have similar products or services. LO1 3. SFAS 131 requires that segment information be reported by the way that management has organized the enterprise for I.performance evaluation II.internal decision making III.geographic region a. I only b. II only c. I and II d. I, II and III LO1 4. SFAS 131 requires the following disclosures except for : a. Revenues b. Depreciation d. Discontinued operations 79
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LO1 5. What is the threshold for reporting a major customer? a. 5 percent of revenues b. 5 percent of profits c. 10 percent of revenues d. 10 percent of profits LO2 6. Pratincole has the following 2005 financial data in thousands: Consolidated revenue per income statement $1,800 Intersegment sales 270 Intersegment transfers 120 Combined revenues of all segments 2,190 Pratincole should add segments if: a. the sum of its segments external revenue does not exceed 1,350 b. the sum of its segments external revenue does not exceed 1,620 c. the sum of its segments revenue including intersegment revenue does not exceed 1,643 d. the sum of its segments revenue including intersegment revenue does not exceed 1,971 LO2 7. Which of the following is not a quantitative threshold for defining a segment’s materiality? a. Segment assets are 10% or more of the combined assets of all operating segments. b. The segment absolute value of its profit or loss is 10% or more of the greater of (1) the combined reported profit of all operating segments that reported a profit or (2) the absolute value of he combined reported loss of all operating segments that reported a loss. c. Segment reported revenue, including intersegment revenues, is 10% or more of the combined revenue of all operating segments. d. Segment residual profit after cost of equity is 10% or more of the combined residual profit of all operating segments. 80
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LO2 8. For an operating segment to be considered a reporting segment under the “reported revenue” threshold, its reported revenue must be 10% or more of: a. the combined enterprise revenues eliminating all relevant intracompany transfers and balances. b. the combined revenues, excluding intersegment revenues, of
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This note was uploaded on 01/29/2009 for the course BA 459 taught by Professor Slattery during the Spring '09 term at Southern Oregon.

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Chapter9ed14 - Chapter 14 Test Bank SEGMENT AND INTERIM...

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