Deck 12: Reporting Segment and Related Information

Question 1

The basis of segmentation required by FAS 131 is called the ____________________ _____________________________ approach.

Answer 1

management

Question 2

Intercompany sales that occur within a vertically integrated segment are called _______________________________ sales.

Answer 2

intrasegment

Question 3

Intercompany sales that occur between operating segments are called __________ __________________________ sales.

Answer 3

intersegment

Question 4

The two major disclosures for reportable operating segments are (a) a measure of _______________________ and (b) a measure of ___________________________.

Question 5

Items that must be disclosed for a reportable segment if those items are included in the measure of profitability used by the CODM are (a)_______________________, (b)______________________, (c) _____________________, (d)______________________, (e) ______________________, (f) ______________________, (g) _______________________, (h) ______________________, and (i) ______________________.

Question 6

Three items that need not be disclosed for reportable operating segments are _______________________, _________________________, and ______________________.

Question 7

Segment profitability for all reportable segments must be reconciled to ________ ___________________________ ________________________________ income.

Question 8

Segment assets for all reportable segments must be reconciled to ______________ ___________________________ assets.

Question 9

Segment revenues for all reportable segments must be reconciled to __________ ___________________________ revenues.

Question 10

To determine whether an operating segment is a reportable segment, it is necessary to perform a test based on ____________________________, a test based on _________________________, and a test based on ________________________.

Question 11

In performing the revenues test to determine reportable segments, one includes any _________________________ sales but excludes any ____________________ sales.

Question 12

Enough operating segments must be presented so that at least 75% of all sales to ___________________________ of all operating segments is shown by reportable operating segments.

Question 13

Aggregation may be performed immediately after all operating segments have been _______________________. It may also be performed later immediately after all ________________________ segments have been determined.

Question 14

Entity-wide disclosures pertain to (a) _____________________________________, (b) ______________________________, and (c) _________________________________.

Question 15

Segment reporting is required of publicly owned companies and privately owned companies.

Question 16

Segment reporting is required for interim period financial statements of publicly owned companies.

Question 17

Segment reporting is not required in the separately issued financial statements of a subsidiary if the parent has also issued consolidated statements in a separate report.

Question 18

Segment reporting applies to not-for-profit entities.

Question 19

FAS 131 requires a single basis of segmentation-one based on products and services.

Question 20

All foreign subsidiaries are automatically operating segments (though some may not be reportable segments).

Question 21

A start-up operation cannot be an operating segment until it has significant revenues.

Question 22

A central research and development facility (having no revenues) could not be an operating segment.

Question 23

FAS 131 does not require that GAAP methods be used in determining amounts reported for segment profitability.

Question 24

FAS 131 does not require that common costs that benefit two or more segments be allocated to the individual segments.

Question 25

The term chief operating decision maker refers to a particular individual-not a function.

Question 26

A vertically integrated business cannot be disaggregated.

Question 27

Intersegment revenues must be disclosed for reportable segments only if those revenues are included in the measure of profitability used by the CODM.

Question 28

Reporting segment cash flows is prohibited.

Question 29

Reporting segment liabilities is optional.

Question 30

Reporting segment research and development costs is not required only for domestic segments.

Question 31

FAS 131 requires use of quantitative thresholds to establish a measure of profitability.

Question 32

FAS 131 permits asymmetrical allocations to segments.

Question 33

In presenting segment data, eliminations and adjustments (that pertain to reportable segments) made in consolidation must be allocated to reportable segments.

Question 34

In presenting segment data, costs accounted for at a consolidated level need not be allocated to segments.

Question 35

A reconciliation must be presented that reconciles the total revenues of the reportable segments to consolidated pretax income.

Question 36

Aggregation of segments is allowed only of reportable operating segments and only if a majority of the aggregation criteria are satisfied.

Question 37

Aggregation of segments is allowed of reportable operating segments only if a majority of the aggregation criteria are satisfied.

Question 38

Aggregation of segments is mandatory if the aggregation criteria are satisfied.

Question 39

Before aggregation of segments can occur, the three quantitative thres-holds tests must be performed.

Question 40

Aggregation of segments can occur before or after performing the three quantitative thresholds tests.

Question 41

To qualify as an operating segment, an entity need satisfy only one of the three 10% or more quantitative thresholds tests.

Question 42

All reportable segments are operating segments but not all operating segments are reportable segments.

Question 43

All operating segments are reportable segments but not all reportable segments are operating segments.

Question 44

Aggregation of segments is allowed only if the 75% test is satisfied.

Question 45

More than one segment may operate in the same geographic area and one segment may include operations in several geographic areas.

Question 46

A company manufacturing widgets both domestically and overseas could have two reportable segments.

Question 47

In disclosing information about major customers, it is necessary to disclose the identity of each such customer.

Question 48

_____ FAS 131 defines an operating segment as a component of an enterprise that has:

A) Assets that are 10% or more of consolidated assets.
B) Assets that are 10% or more of the combined assets of all segments.
C) Revenues that are 10% or more of consolidated revenues.
D) Revenues that are 10% or more of combined revenues of all segments.
E) None of the above.

Question 49

_____ To qualify as an operating segment under FAS 131, a component of an enterprise must

A) Have business activities with external parties or other components of the same enterprise.
B) Be a separate legal entity.
C) Have revenues with unaffiliated customers.
D) Have profitable operations or expectations of having profitable operations.
E) Not be part of a vertically integrated operation.

Question 50

_____ A component of a vertically integrated operation

A) Is always a separate operating segment.
B) Is always a reportable operating segment.
C) Can never be a separate operating segment.
D) Can never be a reportable operating segment.
E) None of the above.

Question 51

_____ Which of the following items are not required to be disclosed for reportable operating segments even though the items are included in the measure of profitability used by the CODM in managing segments?

A) Goodwill amortization expense.
B) Research and development costs.
C) Income tax expense (or benefit).
D) Interest revenues.
E) Extraordinary items.

Question 52

_____ Which of the following items does FAS 131 require to be included in the measure of profitability used by the CODM in managing segments?

A) Goodwill amortization expense.
B) Extraordinary items.
C) Interest revenues.
D) Interest expense.
E) None of the above.

Question 53

_____ Which of the following items does FAS 131 require to be excluded from the measure of profitability to be disclosed for reportable segments?

A) Unusual items.
B) Extraordinary items.
C) Income tax expense (or benefit).
D) Interest expense.
E) None of the above.

Question 54

_____ Which amounts does FAS 131 require to be disclosed for each reportable segment?

Question 55

_____ Which separate segment amounts does FAS 131 require to be disclosed for each reportable segment when the amounts are used in the measure of segment profitability used by the CODM?

Question 56

_____ Which separate segment amounts does FAS 131 require to be disclosed for each reportable segment even though the amounts are not used in the measure of segment profitability used by the CODM?

Question 57

_____ Under FAS 131, revenues could include:

A) Intersegment interest income.
B) Intersegment lease income.
C) Intersegment management fee income.
D) Royalty income.
E) All of the above.

Question 58

_____ The revenues to be disclosed for identified operating segments do not include

A) Intrasegment sales.
B) Intersegment sales.
C) Intersegment interest income.
D) Domestic export sales.
E) None of the above.

Question 59

_____ The 10% revenues test used to determine reportable segments uses a revenues amount that includes

A) Intersegment sales.
B) Intersegment interest income.
C) External interest income.
D) a, b, and c.
E) None of the above.

Question 60

_____ The revenue amounts for a reportable segment that are included in the revenues amount used in the revenues test used to determine reportable segments

A) Could be more than the sum of the revenues amounts that must be disclosed for that reportable segment.
B) Could be less than the sum of the revenues amounts that must be disclosed for that reportable segment.
C) Are always the same as the sum of the revenues amounts that must be disclosed for that reportable segment.
D) Are always different from the sum of the revenues amounts that must be disclosed for that reportable segment.

Question 61

_____ The assets test used for determining reportable segments uses an asset amount that includes:

Question 62

_____ The assets test used for determining reportable segments uses an asset
amount that excludes:

Question 63

_____ To qualify as a reportable segment (disregard the requirements of the 75% test), the segment must satisfy

A) One of the three 10% tests.
B) Two of the three 10% tests.
C) All of the three 10% tests.
D) None of the above.

Question 64

_____ The 75% test is based on

A) Consolidated revenues.
B) Consolidated revenues minus intersegment revenues.
C) Consolidated revenues minus intrasegment revenues.
D) Consolidated revenues plus intersegment revenues minus intrasegment revenues.
E) None of the above.

Question 65

_____ Which of the following disclosed segment items need not be reconciled to the corresponding consolidated amount even though the item is included in the measure of profitability used by the CODM to manage the segment?

A) Interest expense.
B) Extraordinary items.
C) Depreciation expense.
D) Goodwill amortization expense.
E) None of the above.

Question 66

_____ Which of the following mandatory or voluntarily disclosed segment items need not be reconciled to the corresponding consolidated amount?

A) Segment cash flows from operations.
B) Segment interest income.
C) Segment fixed assets.
D) Extraordinary items.
E) None of the above.

Question 67

For segment reporting purposes, the components of a vertically integrated business

A) Cannot be reported separately.
B) Must be reported separately.
C) May or may not be reported separately depending on the circumstances.
D) None of the above.

Question 68

_____ Aggregation of operating segments is allowed

A) Only of nonreportable segments.
B) Only of reportable segments.
C) Only of components of a vertically integrated business.
D) Of both reportable and nonreportable segments
E) None of the above.

Question 69

_____ Aggregation of two or more operating segments (not two or more reportable operating segments) having (1) similar economic characteristics and (2) a majority-not all-of other FAS 131 specified similarities is

A) Mandatory.
B) Prohibited.
C) Optional.
D) None of the above.

Question 70

_____ Aggregation of two or more reportable operating segments (not two or more operating segments) having (1) similar economic characteristics and (2) a majority-not all-of other FAS 131 specified similarities is

A) Mandatory.
B) Prohibited.
C) Optional.
D) None of the above.

Question 71

_____ For segment reporting purposes, aggregation of operating segments (for which no determination has been made as to whether they are reportable segments) is allowed only if they satisfy

Question 72

_____ Which of the following items is not required to be disclosed under FAS 131?

A) Export sales.
B) Major customers.
C) Geographic areas in which sales occur.
D) Types of products and services.
E) None of the above.

Question 73

_____ An entity that operates in several industries has (a) external sales of $40,000,000, (b) intrasegment sales of $3,000,000, and (c) intersegment sales of $7,000,000. In performing the 10% of revenues test to determine reportable segments, the 10% is applied to

A) $3,000,000
B) $40,000,000
C) $43,000,000
D) $47,000,000
E) $50,000,000

Question 74

_____ An entity that operates in several industries has (a) external sales of $40,000,000, (b) intrasegment sales of $3,000,000, and (c) intersegment sales of $7,000,000. In performing the 75% test, the 75% is applied to

A) $3,000,000
B) $40,000,000
C) $43,000,000
D) $47,000,000
E) $50,000,000

Question 75

_____ An entity that operates in several industries has (a) external sales of $50,000,000, (b) intrasegment sales of $5,000,000, and (c) intersegment sales of $4,000,000. In performing the 10% of revenues test to determine reportable segments, the 10% is applied to

A) $4,000,000
B) $50,000,000
C) $54,000,000
D) $55,000,000
E) $59,000,000

Question 76

_____ An entity that operates in several industries has (a) external sales of $50,000,000, (b) intrasegment sales of $5,000,000, and (c) intersegment sales of $4,000,000. In performing the 75% test, the 75% is applied to

A) $4,000,000
B) $50,000,000
C) $54,000,000
D) $55,000,000
E) $59,000,000

Question 77

_____ An entity has four operating segments. For 2006, their measures of profitability are $300,000, $200,000, $(100,000), and $(50,000). In applying the 10% profitability test to determine reportable segments, the 10% is applied to:

A) $(150,000)
B) $ 350,000
C) $ 500,000
D) $ 650,000

Question 78

_____ An entity has four operating segments. For 2006, their measures of profitability are $100,000, $200,000, and $(550,000), and $(5,000). In applying the 10% profitability test to determine reportable segments, the 10% is applied to:

A) $(555,000)
B) $(550,000)
C) $(255,000)
D) $ 300,000
E) $ 855,000

Question 79

_____ Punex has three operating segments and a headquarters office. Information for the assets of these units at 12/31/06 follows:
In applying the 10% of assets test used to determine reportable segments, the 10% is applied to

A) $ 600,000
B) $ 650,000
C) $ 660,000
D) $1,260,000
E) $1,370,000

Question 80

_____ Pinex has three operating segments and a headquarters office. Information for the assets of these units at 12/31/06 follows:
In applying the 10% of assets test used to determine reportable segments, the 10% is applied to

A) $ 700,000
B) $ 800,000
C) $ 950,000
D) $1,300,000
E) $1,750,000