OPERATING SEGMENTS Flashcards
- If a financial report contains both the consolidated financial statements of a parent and the parent’s separate financial statements, segment information is required in
a. The separate financial statements only
b. The consolidated financial statements only
c. Both the separate and consolidated financial statements
d. Neither the separate nor the consolidated financial statements
b. The consolidated financial statements only
- An operating segment is a component of an entity
a. That engages in business activities from which it may earn revenue and incur expenses.
b. Whose operating results are regularly reviewed by the entity’s chief operating decision maker.
c. For which discrete information is available.
d. All of these characterize an operating segment.
d. All of these characterize an operating segment.
- Which quantitative threshold is not a requirement in qualifying a reportable segment?
a. The segment revenue, both external and internal, is 10% or more of the combined external and internal revenue of all operating segments.
b. The segment profit or loss is 10% or more of the greater between the combined profit of profitable segments and combined loss of unprofitable segments.
C. The segment assets are 10% or more of the combined assets of all operating segments.
d. The segment assets are 20% or more of the combined assets of all operating segments.
d. The segment assets are 20% or more of the combined assets of all operating segments.
- An operating segment is considered reportable when any of the following conditions is met, except
a. Segment revenue is 10% or more of the combined revenue of all of all segments.
b. Segment assets are 10% or more of the combined assets of all segments.
c. Segment liabilities are 10% or more of the combined liabilities of all segments.
d. Segment profit or loss is 10% or more of the combined profit of all segments that did not incur a loss.
c. Segment liabilities are 10% or more of the combined liabilities of all segments.
- Which statement is true concerning the 75% overall size test for reportable segments?
a. The total external and internal revenue of all reportable segments is 75% or more of the entity’s external revenue.
b. The total external revenue of all reportable segments is 75% or more of the entity’s external and internal revenue.
c. The total external revenue of all reportable segments is 75% or more of the entity’s external revenue.
d. The total internal revenue of all reportable segments is 75% or more of the entity’s internal revenue.
c. The total external revenue of all reportable segments is 75% or more of the entity’s external revenue.
- The term chief operating decision maker
a. Refers to a manager with a specific title.
b. Must be disclosed by title in the financial reporting for segments.
c. Must be described in the disclosures for the financial reporting for segments.
d. Refers to a function of allocating resources to the operating segments and assessing their performance.
d. Refers to a function of allocating resources to the operating segments and assessing their performance.
- Which statement is not true with respect to a chief operating decision maker?
a. The term chief operating decision maker identifies a function and not necessarily a manager with a specific title.
b. In some cases, the chief operating decision maker could be the chief operating officer.
c. The board of directors acting collectively could qualify as the chief operating decision maker.
d. The chief internal auditor would generally qualify as chief operating decision maker.
d. The chief internal auditor would generally qualify as chief operating decision maker.
- In financial reporting for operating segments, an entity shall disclose all of the following, except
a. Type of product and service from which each reportable segment derives revenue.
b. The title of the chief operating decision maker.
c. Factors used to identify the reportable segments.
d. The basis of measurement of segment profit or loss and segment assets.
b. The title of the chief operating decision maker.
- Operating segments that do not meet any of the quantitative thresholds
a. Cannot be considered reportable.
b. May be considered reportable and separately disclosed if management believes that information about the segment would be useful to the users of the financial statements.
c. May be considered reportable and separately disclosed if the information is for internal use.
d. May be considered reportable and separately disclosed if this is the practice within the economic environment. in which the entity operates.
b. May be considered reportable and separately disclosed if management believes that information about the segment would be useful to the users of the financial statements.
- Segment reporting requires that an entity should provide reconciliations of segment information. Which is not a required reconciliation?
a. The total of the segment revenue of all reporting segments to the entity revenue
b. The total of the segment profit or loss of all reportable segments to the entity profit or loss before tax expense and discontinued operations
c. The total number of major customers of all segments to the total number of major customers of the entity
d. The total assets of all reportable segments to the entity total assets
c. The total number of major customers of all segments to the total number of major customers of the entity
- Entity-wide disclosures include all, except
a. Information about products
b. Information about geographical areas
c. Information about major customers
d. Information about intersegment revenue
d. Information about intersegment revenue
- Which of the following is a required enterprise-wide disclosure regarding external customers?
a. The identity of any external customer considerd to be major by management
b. The identity of any external customer providing 10% or more of a particular operating segment revenue
c. Information on major customers is not required in segment reporting
d. The fact that transactions with a particular external customer constitute at least 10% of the total entity revenue.
d. The fact that transactions with a particular external customer constitute at least 10% of the total entity revenue.
- Which entity is required to report on business segments?
a. Publicly traded
b. Not for profit
c. Joint venture
d. Nonpublic
a. Publicly traded
- An entity must disclose all of the following about each reportable segment if the amounts are used by the chief operating decision maker, except
a. Depreciation expense
b. Allocated expense
c. Interest expense
d. Income tax expense
b. Allocated expense
- An entity shall disclose for each reportable segment all of the following specified amounts included in the measure of profit or loss, except
a. Revenue from external customers
b. Revenue from internal customers
c. Interest revenue
d. Gain on disposal of investment
d. Gain on disposal of investment
- An entity shall disclose for each reportable segment all of the following specified amounts included in the measure of profit or loss, except
a. Depreciation and amortization
b. The entity’s interest in the profit or loss of associate.
c. Income tax expense
d. General corporate expenses
d. General corporate expenses
- An entity must disclose all of the following about each reportable segment if the amounts are used by the chief operating decision maker, except
a. Unusual items
b. Income tax expense
c. Intersegment revenue
d. Cost of goods sold
d. Cost of goods sold
- For segment reporting purposes, which test must be applied to determine if a component is a reportable operating segment?
a. Revenue test and asset test
b. Revenue test, asset test and profit or loss test
c. Revenue test, asset test and expense test
d. Revenue test, asset test and cash flow test
b. Revenue test, asset test and profit or loss test
- What is the practical limit to the number of reportable operating segments?
a. Five segments
b. Ten segments
C. Six segments
d. Four segments
b. Ten segments
- The approach used in segment reporting is known as
a. Segment approach
b. Revenue approach
c. Management approach
d. Enterprise approach
c. Management approach
