Question 1

While preparing its 1991 financial statements, Dek Corp. discovered computational errors in its 1990 and 1989 depreciation expense. These errors resulted in overstatement of each year's income by $25,000, net of income taxes. The following amounts were reported in the previously issued financial statements:

Dek's 1991 net income is correctly reported at $180,000. Which of the following amounts should be reported as prior period adjustments and net income in Dek's 1991 and 1990 comparative financial statements?

Options :

A : Option A

B : Option B

C : Option C

D : Option D

Answer: C

Question 2

Which of the following is not a valuation technique that can be used to measure the fair value of an asset or liability?

Options :

A : The market approach.

B : The impairment approach.

C : The income approach.

D : The cost approach.

Answer: B

Question 3

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

Question 4

In financial reporting of segment data, which of the following must be considered in determining if an industry segment is a reportable segment?

Options :

A : Option A

B : Option B

C : Option C

D : Option D

Answer: A

Question 5

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