Question 1

Which of the following should be disclosed for each reportable operating segment of an enterprise?

Options :

A : Option A

B : Option B

C : Option C

D : Option D

Answer: A

Question 2

How should the effect of a change in accounting principle that is inseparable from the effect of a change in accounting estimate be reported?

Options :

A : As a component of income from continuing operations.

B : By restating the financial statements of all prior periods presented.

C : As a correction of an error.

D : By footnote disclosure only.

Answer: A

Question 3

In which of the following situations should a company report a prior-period adjustment?

Options :

A : A change in the estimated useful lives of fixed assets purchased in prior years.

B : The correction of a mathematical error in the calculation of prior years' depreciation.

C : A switch from the straight-line to double-declining balance method of depreciation.

D : The scrapping of an asset prior to the end of its expected useful life.

Answer: B

Question 4

Reclassification adjustments must be shown in the financial statement that discloses comprehensive income:

Options :

A : To show what portion of comprehensive income is from the realization of current assets.

B : To show the tax effect of items of comprehensive income.

C : To avoid double counting in comprehensive income items, which are currently displayed in net income.

D : To avoid including transactions with shareholders in items of comprehensive income.

Answer: C

Question 5

What information should a public company present about revenues from its reporting segments?

Options :

A : Disclose separately the amount of sales to unaffiliated customers and the amount of intracompany sales.

B :

Disclose as a combined amount sales to unaffiliated customers and intracompany sales between geographic areas.

C :

Disclose separately the amount of sales to unaffiliated customers but not the amount of intracompany sales between geographic areas.

D : No disclosure of revenues from foreign operations need be reported.

Answer: A