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1 | |
The explanatory notes to the financial statements contained in the "financial review" section of the annual report include descriptions of all of the following, except: |
| | A) | Accounting Changes |
| | B) | Employee Productivity Statistics |
| | C) | Events Subsequent to the Balance Sheet Date |
| | D) | Contingencies and Commitments |
| | E) | Segment Information |
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2 | |
Required segment information disclosures do not include data concerning: |
| | A) | major customers that account for more than 10% of the company's total sales. |
| | B) | sales made to subsidiaries by each segment. |
| | C) | identifiable assets of each segment. |
| | D) | operating profits of each segment. |
| | E) | capital expenditures of each segment. |
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3 | |
"Significant Accounting Policy" disclosures normally provide detailed information in relation to all of the following, except: |
| | A) | income taxes. |
| | B) | employee benefits. |
| | C) | stock option plans. |
| | D) | depreciation methods. |
| | E) | sales returns and allowances. |
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4 | |
Which of these disclosures is unaudited and appears after the audit opinion in the annual report? |
| | A) | Segment information. |
| | B) | Significant accounting policies. |
| | C) | Contingencies and commitments. |
| | D) | Five-year summary of financial data. |
| | E) | Events subsequent to the balance sheet date. |
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5 | |
The nature and content of disclosures relate to all of the following except: |
| | A) | accounting changes. |
| | B) | segment information. |
| | C) | fair market value. |
| | D) | contingencies and commitments. |
| | E) | events subsequent to the balance sheet date. |
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6 | |
Which of the following is not a topic that is likely to be discussed as a significant accounting policy? |
| | A) | Depreciation method. |
| | B) | Earnings per share of common stock calculation details. |
| | C) | Inventory valuation method. |
| | D) | Method of estimating uncollectible accounts receivable. |
| | E) | Method of consolidation of subsidiaries. |
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7 | |
When an entity changes its accounting from one generally accepted method to another generally accepted method: |
| | A) | financial statements of all prior years are changed to maintain comparability. |
| | B) | an explanatory note stating that the change was approved by the Financial Accounting Standards Board is required. |
| | C) | the dollar effect of the change on both the balance sheet and income statement must be disclosed. |
| | D) | changes like this are not permitted. |
| | E) | the change must be authorized by the Securities Exchange Commission. |
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8 | |
The impact of changing price levels on amounts reported in financial statements is: |
| | A) | reported as a separate item on the balance sheet. |
| | B) | reported as a separate item on the income statement. |
| | C) | accomplished by reporting assets at their replacement cost. |
| | D) | required to be described in the explanatory notes to the financial statements. |
| | E) | encouraged, but not required to be described in the explanatory notes to the financial statements. |
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9 | |
Management's statement of responsibility: |
| | A) | explains that the entity's financial statements are the responsibility of the entity's auditors. |
| | B) | states that the financial statements are free of significant error. |
| | C) | affirms that management is responsible for assuring adherence to internal control policies and procedures. |
| | D) | guarantees that the firm has operated in a highly ethical manner. |
| | E) | is a required non-quantitative financial statement for firms having publicly trades securities. |
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10 | |
Which of the following is the proper paragraph sequence for an independent Auditor's Report? |
| | A) | Scope, introduction, opinion. |
| | B) | Introduction, scope, opinion. |
| | C) | Opinion, scope, summary. |
| | D) | Introduction, opinion, scope. |
| | E) | Introduction, summary, opinion. |
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2002 McGraw-Hill Higher Education