Question 1

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 2

Which of the following facts concerning fixed assets should be included in the summary of significant accounting policies?

Options :

A : Option A

B : Option B

C : Option C

D : Option D

Answer: C

Question 3

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 4

What is the purpose of information presented in notes to the financial statements?

Options :

A : To provide disclosures required by generally accepted accounting principles.

B : To correct improper presentation in the financial statements.

C : To provide recognition of amounts not included in the totals of the financial statements.

D : To present management's responses to auditor comments.

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

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