AC593_FAR1 - Lucille McElroy: FAR 1 10 ? M/C Quiz Page 1 of...

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Grade for Lucille McElroy: FAR 1 10 ? M/C Quiz Numeric grade: 50 Letter grade: Comments: (none) < Close Window Autograde Summary These are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below. Date Taken: 5/31/2011 6:45:45 PM Time Spent: 0:58:16 Points Received: 50 / 100 (50%) Question Type: # Questions: # Correct: Multiple choice 10 5 Grade Details 1. Question: The Ajax Corporation reported the following operating results and net income (net loss) from its components for the year ended December 31: Based purely on operating results, which of the components would be deemed reportable segments? Component Net Eliminations Consolidated Astor $215,000 $(120,000) $95,000 Bejax 30,000 0 30,000 Carter (180,000) 50,000 (130,000) Davis 80,000 (50,000) 30,000 Elbow (20,000 ) 20,000_ 0 $125,000 $(100,000) $25,000 Your Answer: Astor, Bejax, Carter, Davis, and Elbow. Astor, Bejax, Carter, and Davis. Astor, Bejax, and Davis. INCORRECT Astor, Carter, and Davis. CORRECT ANSWER Instructor Explanation: RULE: A segment meets the size test if the absolute amount of its reported profit or loss is 10% or more of the greater, in absolute amount, of: (1) The combined reported profit of all operating segments that did not report a loss, or (2) The combined reported loss of all operating segments that did report a loss. Page 1 of 10 Lucille McElroy: FAR 1 10 ? M/C Quiz 5/31/2011 ..
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Choice "d" is correct. Astor, Carter, and Davis exceed the 10% threshold test for segment reporting. Application of the rule is computed as follows: Net 10% Segment Component Eliminations Consolidated Income Loss Threshold Reported Astor $215,000 $(120,000) $95,000 215,000 - 32,500 Yes Bejax 30,000 30,000 30,000 - 32,500 No Carter (180,000) 50,000 (130,000) - (180,000) 32,500 Yes Davis 80,000 (50,000) 30,000 80,000 - 32,500 Yes Elbow (20,000) 20,000 - - (20,000) 32,500 No $125,000 $(100,000) $25,000 325,000 (200,000) Ajax determines its segments based on unconsolidated financial results by segment. The absolute amount of income ($325,000) is greater than the absolute amount of loss ($200,000). Ajax uses 10% of total income from segments earning income, $32,500, as the basis for determining reporting. Choices "a", "b", and "c" are incorrect per the above rule. Points Received: 0 of 10 Comments: 2. Question: Users of financial statements frequently rely upon the data displayed in the financial statements to predict future financial outcomes. Financial accounting concepts refer to the characteristic of accounting information that provides predictive value to users as the quality of: Your CORRECT Page 2 of 10 Lucille McElroy: FAR 1 10 ? M/C Quiz 5/31/2011 ..
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Answer: Relevance Reliability Comparability Understandability Instructor Explanation: Choice "a" is correct. The qualitative characteristic of accounting
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This note was uploaded on 05/31/2011 for the course ACCT 593 taught by Professor Karylfriedman during the Spring '11 term at Keller Graduate School of Management.

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AC593_FAR1 - Lucille McElroy: FAR 1 10 ? M/C Quiz Page 1 of...

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