Choose the BEST answer for the following questions.

_____ 1. Which of the following is NOT an argument against publishing segmental information?

a. Segmental information might be misleading

b. It might give your competitors too much information

c. It gives users more information than they need

d. All of these are arguments against publishing segmental information

_____ 2. What is the purpose of reporting for segments?

a. To separate information so users understand the financial position of the company and its components better, where components may be defined in various ways

b. To separate the financial statements of parents and subsidiaries

c. To eliminate any reporting differences from one company to the next

d. To assure that users of information have adequate information about product lines

_____ 3. The management approach of accounting for segments uses

a. GAAP reporting standards

b. APB Opinion No. 28 standards

c. management accounting evaluation techniques

d. all of these

_____ 4. Which of the following is a potential segment?

a. Product or service

b. Geographic area

c. Customer type

d. All of these

_____ 5. Segment reporting should emphasize consistency between

a. profit and loss

b. assets and liabilities

c. internal and external reporting

d. techniques between companies

_____ 6. How should firms allocate common costs?

a. Joint costs should be charged to the most profitable segment

b. Expense pools should be allocated based on benefits to each segment

c. All common costs should be divided equally among segments

d. Any expenses not in a pool should be charged to corporate management

_____ 7. What characteristic is NOT found in an operating segment?

a. It earns revenues and incurs expenses

b. The chief operating decision maker reviews performances and makes decisions

c. The information is always reported separately for all segments, regardless of the size of the segment

d. Disclosure is required for each operating segment subject to limiting criteria

_____ 8. What are the quantitative thresholds? Segments must

a. meet one or more size requirements to be reportable

b. meet all size requirements to be reportable

c. be aggregated to meet size requirements

d. make a net income to be reportable

_____ 9. What is the seventy-five percent test?

a. Only seventy-five percent of the information must be accurate

b. The segments must account for seventy-five percent of revenue

c. Only seventy-five percent of the revenues must be included

d. The gross profit margin must be seventy-five percent or more

_____10. Which of the following is NOT part of the information is to be presented in segment information?

a. Managements internal decision-making approach

b. Information about the segments assets expenditures and carrying basis of influential investments

c. Differences in measurement between the segment and the consolidated entity

d. All segment performance information, whether management uses it for internal decision-making or not

_____11. Where can segment information be presented in the annual report?

a. In the body of the financial statements

b. Entirely in the footnotes

c. In a separate schedule as part of the financial statements

d. All of these

_____12. How does the international community view segmental information?

a. Segment reporting is not emphasized

b. It has been encouraged since 1998

c. It has been required since 1982

d. It has more flexibility than the U.S. standard

_____13. Interim statements are intended to

a. provide more timely information

b. divide operations into smaller units of production

c. increase compliance to FASB rulings

d. give better information about seasonal businesses

_____14. One of the difference between segment reporting under U.S. GAAP and under IFRS 8 is

a. what information must be disclosed

b. how segments are defined

c. how intangible assets are reported

d. use of the management approach

_____15. How should costs and expenses be handled on interim statements?

a. Generally the same way as the year-end statements

b. Most costs and expenses can be tied to revenues or can be immediately expensed

c. There should be no arbitrary assignment of costs

d. All of these are true of costs and expenses in interim statements