chap008 - Multiple Choice Questions 1. SFAS 14 required a...

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Multiple Choice Questions 1. SFAS 14 required a U.S. corporation to disclose disaggregated information for A) industry segments, geographic regions in the United States, and major customers. B) domestic and foreign operations, imported materials, export sales, and major customers. C) industry segments, export sales, and imported materials. D) manufacturing, marketing, and administrative divisions of the company. E) industry segments, domestic and foreign operations, export sales, and major customers. Answer: E Difficulty: Medium 2. Which tests must a company use to determine which operating segments require separate disclosure? A) revenue test and asset test B) revenue test , profit or loss test , and asset test C) revenue test and profit or loss test D) profit or loss test and asset test E) revenue test , asset test , and liability test Answer: B Difficulty: Easy 3. Coulanger Corp. identified four operating segments: A, B, C, and D. Segment A met the revenue test for identifying reportable segments while Segment C met the revenue test , profit or loss test , and asset test . Segment B and Segment D did not meet any of these tests. Which of these segments must be disclosed separately? Segment A Segment B Segment C Segment D A. Yes Yes No No B. Yes Yes Yes Yes C. Yes No Yes No D. No Yes No Yes E. No No Yes Yes A) Entry A B) Entry B C) Entry C D) Entry D E) Entry E Answer: C Difficulty: Easy
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4. Kaycee Corporation's revenues for the year ended December 31, 2004, were as follows: Consolidated Revenue per the Income Statement $1,200,000 Upstream Intersegment Sales $ 180,000 Downstream Intersegment Sales $ 60,000 For purposes of the Revenue Test, what amount will be used as the benchmark for determining whether a segment is reportable? A) $ 6,000 B) $ 24,000 C) $ 120,000 D) $ 144,000 E) $ -0- Answer: D Difficulty: Easy Use the following to answer questions 5-8: Natarajan, Inc. had the following operating segments, with the indicated amounts of segment revenues and segment expenses : External Intersegment Segment Segment Revenues Sales Expenses A $ 7,500,000 $ 600,000 $ 6,300,000 B 2,900,000 1,000,000 4,300,000 C 700,000 1,300,000 2,200,000 D 4,000,000 250,000 4,100,000 E 1,600,000 800,000 2,700,000 5. According to the revenue test , which segments would require disaggregation? A) A, B, D, and E B) A and B C) B and C D) A, B, and D E) C, D, and E Answer: A Difficulty: Easy
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6. According to the profit or loss test , which segments would require disaggregation? A) A, B, D, and E B) A, B, C, and E C) A, B, and D D) A and D E) A only Answer: B Difficulty: Medium 7. For purposes of the profit or loss test, segment C's operating profit or loss is A) $ 1,300,000. B) $ 700,000. C) $ 2,000,000.
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