Question 1

An analysis of Abbey Company's operating segments provides the following information:
 
-Refer to the above information.Which of the operating segments above meet the revenue test?
A)B,D,and E
B)A and D
C)A,B,and D
D)B,C,D,and E

Accepted Answer

B

Question 2

Main Manufacturing Corporation reported consolidated revenues of $50,000,000 on its income statement for 20X8.The management of the corporation identified 3 industry segments,M,N,and O.These segments had the following intersegment sales and transfers during 20X8:

For Main Manufacturing Corporation,the revenue test would be satisfied if any of its industry segments had revenue equal to or greater than which of the following?
A)$7,400,000
B)$5,740,000
C)$5,000,000
D)$4,260,000

Accepted Answer

The revenue test is satisfied if any industry segment has revenue equal to or greater than 10% of the consolidated revenue ($5,000,000 in this case). Therefore, only segment M satisfies this condition with intersegment sales of $5,740,000. Segments N and O do not have revenue equal to or greater than 10% of the consolidated revenue.

Question 3

Trimester Corporation's revenue for the year ended December 31,20X8,was as follows:

Trimester has a reportable operating segment if that segment's revenue exceeds:
A)$65,500
B)$60,000
C)$64,500
D)$61,000

Accepted Answer

A

Question 4

Dragon Company has two reportable segments,A and B.Segment A made $3,000,000 of sales to external customers and $200,000 of sales to other operating segments.Segment B made sales of $5,000,000 to external customers and $1,200,000 of sales to other operating segments.Dragon Company reported $9,600,000 of revenues on its consolidated income statement.What calculation below correctly determines whether Dragon Company's reportable segments satisfy the 75% revenue test?
A)$8,000,000/$9,600,000
B)$8,000,000/$11,000,000
C)$9,400,000/$9,600,000
D)$9,400,000/$11,000,000

Accepted Answer

Segment A and B's combined sales to external customers are $8,000,000. This is 83% of the company's total revenue of $9,600,000.

Question 5

The management approach to the definition of segments for financial reporting expects a company to:
I.Report disaggregated information on the same organizational basis as used by the company's internal decision makers.
II.Report disaggregated information for at least ten segments.
A)I
B)II
C)Both I and II
D)Neither I nor II

Accepted Answer

The management approach to segment reporting requires a company to report disaggregated information on the same internal organizational basis as used by the company's internal decision makers. It does not specify a minimum number of segments that must be reported, so II is not correct. Therefore, only I is correct, making the best choice A.

Question 6

Five of eight internally reported operating segments of Rollins Company qualify under the standards set by ASC 280 for segment reporting.However,the five identified segments do not meet the 75 percent revenue test.ASC 280 prescribes that management:
A)subdivide segments until there are at least 10 reportable segments.
B)consolidate the remaining operating segments and include them under an "all other" category.
C)select additional operating segments until the 75% threshold is met.
D)include the heading "corporate headquarters" as an operating segment.

Accepted Answer

ASC 280 requires that if the total external revenue reported by the operating segments constitutes less than 75% of the entire company's revenue, additional segments must be identified as reportable segments until the 75% threshold is met.

Question 7

An analysis of Abbey Company's operating segments provides the following information:
 
-Refer to the above information.Which of the operating segments above meet the operating profit (loss)test?
A)B and E
B)A and B
C)A,B,and E
D)A,B,C,and E

Accepted Answer

The answer of An analysis of Abbey Company's operating segments...

Question 8

Cherokee Company reported consolidated revenue of $90,000,000 in 20X5.Cherokee operates in two geographic areas,domestic and Europe.The following information pertains to these two areas:

What calculation below is correct to determine if the revenue test is satisfied for the European operations?
A)$28,000,000/$90,000,000
B)$28,000,000/$100,000,000
C)$32,000,000/$100,000,000
D)$32,000,000/$90,000,000

Accepted Answer

The answer of Cherokee Company reported consolidated revenue of $90,000,000...

Question 9

An analysis of Abbey Company's operating segments provides the following information:
 
-Refer to the above information.Which of the operating segments above are reportable segments?
A)B,C,and D
B)A,B,D,and E
C)B,D,and E
D)A,B,C,D,and E

Accepted Answer

All segments A, B, C, D, and E are considered reportable segments because they meet one or more of the quantitative thresholds for reporting, such as revenue, profit or loss, or assets exceeding 10% of the combined totals for all operating segments, or other qualitative factors making them significant for reporting purposes.

Question 10

Trevor Company discloses supplementary operating segment information for its three reportable segments.Data for 20X8 are available as follows:

Additional 20X8 expenses include indirect operating expenses of $200,000.Appropriately selected common indirect operating expenses are allocated to segments based on the ratio of each segment's sales to total sales.The 20X8 operating profit for Segment B was:
A)$180,000
B)$120,000
C)$150,000
D)$250,000

Accepted Answer

The answer of Trevor Company discloses supplementary operating segment information...

Question 11

ASC 280 uses a(n)________ approach to the definition of segments.
A)line of business
B)entity
C)portfolio
D)management

Accepted Answer

ASC 280 adopts a management approach to the definition of segments, meaning it defines operating segments based on how an entity's management internally organizes and reports financial information for decision-making purposes.

Question 12

Crisfield Company has two reportable segments,C and D.Segment C made $4,000,000 of sales to external customers and $400,000 of sales to other operating segments.Segment D,on the other hand,made sales of $8,000,000 to external customers and $1,600,000 of sales to other operating segments.Crisfield Company reported $13,200,000 of revenues on its consolidated income statement.What calculation below correctly determines whether Crisfield Company's reportable segments satisfy the 75% revenue test?
A)$14,000,000/$15,200,000
B)$14,000,000/$13,200,000
C)$12,000,000/$13,200,000
D)$12,000,000/$15,200,000

Accepted Answer

The 75% revenue test is based on external sales. Segment C and D's external sales total $12,000,000 ($4,000,000 + $8,000,000). The consolidated revenue is $13,200,000. The calculation is $12,000,000 / $13,200,000.

Question 13

Zeus Corporation has determined that it has 15 reportable operating segments.In order to comply with the standard for segment disclosures,Zeus Corporation should do which of the following?
A)Report 10 reportable segments and disclose the remaining 5 segments as other operating segments.
B)Report 10 reportable segments by combining the most closely related segments.
C)Report 15 reportable segments as long as the 75 percent revenue test has been satisfied.
D)Report 12 reportable segments and show all other operating segments in a column labeled "Other Operating Segments."

Accepted Answer

Combining the most closely related segments is the correct way to comply with the standard for segment disclosures.

Question 14

In 20X6 and 20X7,each of Putney Company's four operating segments met one of the three quantitative tests for segment reporting.In 20X8,Segment B failed to qualify under the prescribed tests because of abnormal financial conditions.The other three segments qualified for reporting.For 20X8,Segment B:
A)should be excluded from segment disclosure but referred to in the management letter to shareholders.
B)should be distinctly separated from the other three segments and listed as a "nonqualifying" segment.
C)should be combined with one of the other three segments and reported.
D)should be included in the segment disclosures at the discretion of management.

Accepted Answer

Segment B should be included in the segment disclosures at the discretion of management, even if it fails to meet the quantitative thresholds in a particular year, especially if it has been reported in prior periods. This approach allows for consistency and transparency in reporting, giving a complete view of the company's operations to the stakeholders.

Question 15

Operand Corporation reported consolidated revenues of $30,000,000 on its income statement for 20X4.The management of the corporation identified three industry segments,X,Y,and Z.These segments had the following intersegment sales and transfers during 20X4:

For Operand Corporation,the revenue test would be satisfied if any of its industry segments had revenue equal to or greater than which of the following?
A)$2,450,000
B)$3,000,000
C)$3,550,000
D)$5,500,000

Accepted Answer

The answer of Operand Corporation reported consolidated revenues of $30,000,000...

Question 16

Biometric Corporation's revenue for the year ended December 31,20X6,was as follows:

Biometric has a reportable operating segment if that segment's revenue exceeds:
A)$40,000
B)$42,000
C)$43,000
D)$45,000

Accepted Answer

The answer of Biometric Corporation's revenue for the year ended...

Question 17

Collins Company reported consolidated revenue of $120,000,000 in 20X8.Collins operates in two geographic areas,domestic and Asia.The following information pertains to these two areas:

What calculation below is correct to determine if the revenue test is satisfied for the Asian operations?
A)$58,000,000/$140,000,000
B)$50,000,000/$120,000,000
C)$58,000,000/$120,000,000
D)$50,000,000/$140,000,000

Accepted Answer

The answer of Collins Company reported consolidated revenue of $120,000,000...

Question 18

Tuttle Company discloses supplementary operating segment information for its three reportable segments.Data for 20X3 are available as follows:

Allocable costs for the year were $54,000.Allocable costs are assigned based on the ratio of a segment's income before allocable costs to total income before allocable costs.The 20X3 operating profit for Segment A was:
A)$196,000
B)$223,000
C)$225,000
D)$250,000

Accepted Answer

The answer of Tuttle Company discloses supplementary operating segment information...

Question 19

Tuttle Company discloses supplementary operating segment information for its three reportable segments.Data for 20X3 are available as follows:

Additional 20X3 expenses include indirect operating expenses of $100,000.Appropriately selected common indirect operating expenses are allocated to segments based on the ratio of each segment's sales to total sales.The 20X3 operating profit for Segment A was:
A)$150,000
B)$180,000
C)$200,000
D)$250,000

Accepted Answer

The answer of Tuttle Company discloses supplementary operating segment information...

Question 20

Trevor Company discloses supplementary operating segment information for its three reportable segments.Data for 20X8 are available as follows:

Allocable costs for the year was $180,000.Allocable costs are assigned based on the ratio of a segment's income before allocable costs to total income before allocable costs.The 20X8 operating profit for Segment B was:
A)$110,000
B)$180,000
C)$126,000
D)$120,000

Accepted Answer

The answer of Trevor Company discloses supplementary operating segment information...

Quiz 13: Segment and Interim Reporting

An analysis of Abbey Company's operating segments provides the following information: -Refer to the above information.Which of the operating segments above meet the revenue test?

Trimester Corporation's revenue for the year ended December 31,20X8,was as follows: Trimester has a reportable operating segment if that segment's revenue exceeds:

The management approach to the definition of segments for financial reporting expects a company to: I.Report disaggregated information on the same organizational basis as used by the company's internal decision makers. II.Report disaggregated information for at least ten segments.

Five of eight internally reported operating segments of Rollins Company qualify under the standards set by ASC 280 for segment reporting.However,the five identified segments do not meet the 75 percent revenue test.ASC 280 prescribes that management:

An analysis of Abbey Company's operating segments provides the following information: -Refer to the above information.Which of the operating segments above meet the operating profit (loss) test?

Cherokee Company reported consolidated revenue of $90,000,000 in 20X5.Cherokee operates in two geographic areas,domestic and Europe.The following information pertains to these two areas: What calculation below is correct to determine if the revenue test is satisfied for the European operations?

An analysis of Abbey Company's operating segments provides the following information: -Refer to the above information.Which of the operating segments above are reportable segments?

ASC 280 uses a(n) ________ approach to the definition of segments.

Zeus Corporation has determined that it has 15 reportable operating segments.In order to comply with the standard for segment disclosures,Zeus Corporation should do which of the following?

In 20X6 and 20X7,each of Putney Company's four operating segments met one of the three quantitative tests for segment reporting.In 20X8,Segment B failed to qualify under the prescribed tests because of abnormal financial conditions.The other three segments qualified for reporting.For 20X8,Segment B:

Biometric Corporation's revenue for the year ended December 31,20X6,was as follows: Biometric has a reportable operating segment if that segment's revenue exceeds:

Collins Company reported consolidated revenue of $120,000,000 in 20X8.Collins operates in two geographic areas,domestic and Asia.The following information pertains to these two areas: What calculation below is correct to determine if the revenue test is satisfied for the Asian operations?