Choose the best answer for each of the following questions.
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| 1 | |
"A component of an entity whose activities represent a separate line of business or class of customer" is the definition of: |
| | A) | An industry segment |
| | B) | A business segment |
| | C) | An operating segment |
| | D) | A product line |
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| 2 | |
A Statement of the FASB requires measurement of segment profit or loss in accordance with: |
| | A) | Generally accepted accounting principles |
| | B) | The enterprise's internal financial reporting system |
| | C) | The cash basis of accounting |
| | D) | Guidelines provided by the SEC in Regulation S-K |
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| 3 | |
The Statement cited in 2 requires segmentation of business activities based on: |
| | A) | Product lines |
| | B) | Lines of business |
| | C) | Standard Industrial Classifications |
| | D) | The way a business enterprise is managed |
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| 4 | |
If planned material price variances and volume or capacity variances are expected to be absorbed by the end of the fiscal year, their treatment for an interim accounting period is: |
| | A) | Deferral at the end of the interim period |
| | B) | Inclusion in cost of goods sold for the interim period |
| | C) | Presentation as an extraordinary item for the interim period |
| | D) | None of the foregoing |
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| 5 | |
Which of the following need not be included in publicly owned companies' interim reports to stockholders? |
| | A) | Cumulative effect of a change in accounting principle |
| | B) | Significant changes in financial position |
| | C) | Changes in accounting estimates |
| | D) | None of the foregoing |
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| 6 | |
Damon Company plans to dispose of a business segment. On the measurement date the loss from the disposal is estimated to be $950,000. Included in the $950,000 are severance pay of $100,000 and employee relocation costs of $50,000, both of which are directly associated with the decision to dispose of the segment; and estimated losses of $200,000 from operations of the segment from the beginning of the fiscal year to the measurement date are not included in the estimated loss from the disposal. Disregarding income taxes, Damon's income statement includes a loss on discontinued operations (a separate component of income below the caption income from continuing operations) of: |
| | A) | $750,000 |
| | B) | $850,000 |
| | C) | $900,000 |
| | D) | $1,100,000 |
| | E) | Some other amount |
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| 7 | |
The United States statute that governs trading of securities over the counter is: |
| | A) | The Securities Act of 1933 |
| | B) | The Securities Exchange Act of 1934 |
| | C) | The Stockbrokers Act of 1936 |
| | D) | The Corporate Securities Act of 1938 |
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| 8 | |
Staff Accounting Bulletins issued by the SEC are intended to achieve a wide dissemination of: |
| | A) | Rules of the SEC |
| | B) | Interpretations of the SEC |
| | C) | Publications bearing the SEC's official approval |
| | D) | Practices followed by the chief accountant of the SEC |
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| 9 | |
Changes in Regulation S-X are the responsibility of the SEC's: |
| | A) | Chief accountant |
| | B) | Division of Enforcement |
| | C) | Division of Corporate Regulation |
| | D) | Division of Corporate Finance |
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| 10 | |
A line of business differs from a business segment. |
| | A) | True |
| | B) | False |
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| 11 | |
Disclosures required by FASB Statement No. 14 include an enterprise's operations in different industries. |
| | A) | True |
| | B) | False |
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| 12 | |
The gain or loss from disposal of a business segment is reported, gross net of income taxes, in a business enterprise. |
| | A) | True |
| | B) | False |
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| 13 | |
The SEC is administered by five commissioners appointed for five year terms by the President and confirmed by Senate of the United States. |
| | A) | True |
| | B) | False |
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| 14 | |
The sales or gross revenue is not required to be disclosed on Interim Financial reports. |
| | A) | True |
| | B) | False |
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