Question 1

Which of the following should be disclosed for each reportable operating segment of an enterprise?

Options :

A : Option A

B : Option B

C : Option C

D : Option D

Answer: A

Question 2

Which of the following is not a valuation technique that can be used to measure the fair value of an asset or liability?

Options :

A : The market approach.

B : The impairment approach.

C : The income approach.

D : The cost approach.

Answer: B

Question 3

While preparing its 1991 financial statements, Dek Corp. discovered computational errors in its 1990 and 1989 depreciation expense. These errors resulted in overstatement of each year's income by $25,000, net of income taxes. The following amounts were reported in the previously issued financial statements:

Dek's 1991 net income is correctly reported at $180,000. Which of the following amounts should be reported as prior period adjustments and net income in Dek's 1991 and 1990 comparative financial statements?

Options :

A : Option A

B : Option B

C : Option C

D : Option D

Answer: C

Question 4

If a company is not presenting comparative financial statements, the correction of an error in the financial statements of a prior period should be reported, net of applicable income taxes, in the current:

Options :

A : Retained earnings statement after net income but before dividends.

B : Retained earnings statement as an adjustment of the opening balance.

C : Income statement after income from continuing operations and before extraordinary items.

D : Income statement after income from continuing operations and after extraordinary items.

Answer: B

Question 5

In general, an enterprise preparing interim financial statements should:

Options :

A : Defer recognition of seasonal revenue.

B : Disregard permanent decreases in the market value of its inventory.

C : Allocate revenues and expenses evenly over the quarters, regardless of when they actually occurred.

D : Use the same accounting principles followed in preparing its latest annual financial statements.

Answer: D

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