Question :
11.In financial reporting for segments of a business enterprise, the : 1242723
11.In financial reporting for segments of a business enterprise, the operating profit or loss of a segment should include
Reasonably allocated
CommonTraceable
Operating costsoperating costs
a.No No
b.No Yes
c.Yes No
d.Yes Yes
12.The profitability information that should be reported for each reportable segment of a business enterprise consists of
a.An operating profit-or-loss figure consisting of segment revenues less traceable costs and allocated common costs
b.An operating profit-or-loss figure consisting of segment revenues less traceable costs but not allocated common costs
c.An operating profit-or-loss figure consisting of segment revenues less allocated common costs but not traceable costs
d.Segment revenues only
13.A foreign subsidiary’s function currency is its local currency that has not experienced significant inflation. The weighted average exchange rate for the current year would be the appropriate exchange rate for translating
Wages expenseCustomers
a.Yes Yes
b.Yes No
c.No No
d.No Yes
14.A subsidiary’s functional currency is the local currency that has not experienced significant inflation. The appropriate exchange rate for translating the depreciation on plant assets in the income statement of the foreign subsidiary is the
a.Exit exchange rate
b.Historical exchange rate
c.Weighted average exchange rate over the economic life of each plant asset
d.Weighted average exchange rate for the current year
15.In a business combination that is accounted for under the acquisition method, the entity that obtains control over one or more businesses and establishes the acquisition date that control was achieved is called the
a.Controller.
b.Acquirer.
c.Proprietor.
d.Controlling interest.
16.Under the acquisition method for a business combination, the cost incurred to effect the business combination, such as finders and legal fees are
a.Considered part of the historical cost of the business.
b.Expensed as incurred.
c.Allocated, along with the purchase price of the acquired company’s stock to the assets of the acquiree company.
d.Deferred until a full accounting of all costs to acquire the acquire company are known.
17.Under which of the theories of equity is a manager’s goals considered as important as those of the common stockholder.
a.Proprietary theory.
b.Commander theory.
c.Entity theory.
d.Enterprise theory.
18.For a business combination, we measure all assets and liabilities of an acquired company at fair value. Fair value
a.Is an exit value.
b.Is an entry value.
c.Is an appraisal value.
d.Can be either an exit value or an entry value depending on the circumstances.
19.Under the acquisition method of accounting for a business combination, restructuring costs are
a.Capitalized and amortized over a period not exceeding ten years.
b.Fees paid to lawyers and accountants to bring about the business combination .
c.Costs incurred to effect the business combination.
d.Treated as post acquisition expenses.
20.Under the acquisition method of accounting for a business combination, goodwill is equal to
a.The acquired company’s ability to generate excess profits .
b.The excess of the cost of the acquisition plus the fair value of the noncontrolling interest over the fair value of the acquiree’s net assets.
c.The excess of the cost of the acquisition over the fair value of the acquiree’s net assets.
d.The excess of the fair value of acquiree’s net assets over the cost of acquisition.
21.Under the acquisition method of accounting for a business combination, a bargain purchase is
a.Reported as goodwill in the balance sheet.
b.Tested annually for impairment.
c.Reported as a gain in the income statement.
d.Reported as an adjustment to other comprehensive income.
22.The acquisition method of accounting for a business combination is consistent with
a.Entity theory.
b.Proprietary theory.
c.Parent company theory.
a.Residual interest theory.
23.Under the acquisition method of accounting for a business combination when the parent company has acquired only 90% of the voting stock of a subsidiary,
a.10% of the goodwill will be reported in a separate section of the balance sheet because it belongs to the noncontrollinginterest .
b.The consolidated balance sheet will report 100% of the value of goodwill.
c.The consolidated balance sheet will report 90% of the value of goodwill.
d.Goodwill will be amortized over its useful life or 40 years whichever comes first.
24.The noncontrolling interest in a subsidiary is reported in the consolidated balance sheet
a.As an investment.
b.As a liability.
c.At fair value, as determined on the acquisition date.
d.As an element of stockholders’ equity.
