ACCT 501 FINAL EXAM QUESTIONS
AND ANSWERS GRADED A+ 2026
Which test must a company use to determine which operating segments require separate
disclosure? - ANS Revenue text, profit or loss test, and asset test
Generally accepted accounting principles require a US corporation to disclose the following
disaggregated information for each operating segment, except:
revenues from external customers,
unusual items,
cost of goods sold, or depreciation expenses - ANS Cost of Goos sold
Which of the following is not one of the criteria management should consider in determining
whether business activities and environments of an operating segment are similar?
The geographical location of the operations,
the nature of the production process,
distribution methods,
the nature of the regulatory environment, if applicable - ANS The geographical location of the
operations
Which of the following statements is false concerning the number of operating segments that
should be disclosed?
a. at least 75 percent of total company sales made to outsiders should be presented
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
1
, b. even though an operating segment has been reportable in the past and is of continuing
significance, it must meet at least one of the three reporting tests to report separately in the
current year
c. if the 75 percent rule is not met by the results of applying all three reporting tests, additional
segments must be disclosed separately despite their failure to satisfy even one of the three
quantitative thresholds
d. the practical limit to the number of operating segments is 10 - ANS Even though an
operating segment has been reportable in the past and is of continuing significance, it must
meet at least one of the three reporting tests to report separately in the current year
What is the revenue test? - ANS segment revenues, both external and inter-segment, are 10
percent or more of the combined revenue, internal and external, of all reported operating
segments
What is the asset test? - ANS segment assets are 10% or more of the combined assets of all
operating segments
What is the profit or loss test? - ANS segment profit or loss is 10% or more of the larger (in
absolute terms) of the combined reported profit of all profitable segments or the combined
reported loss of all segments incurring a loss
A spot rate may be defined as the - ANS price a foreign currency can be purchased or sold
today (can change)
The forward rate may be defined as - ANS the price today at which a foreign currency can be
purchased or sold in the future
predetermined rate but use someday in the future
Which statement is true regarding foreign currency options?
A. A foreign currency option gives the holder the obligation to buy or sell foreign currency in the
future.
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
2
AND ANSWERS GRADED A+ 2026
Which test must a company use to determine which operating segments require separate
disclosure? - ANS Revenue text, profit or loss test, and asset test
Generally accepted accounting principles require a US corporation to disclose the following
disaggregated information for each operating segment, except:
revenues from external customers,
unusual items,
cost of goods sold, or depreciation expenses - ANS Cost of Goos sold
Which of the following is not one of the criteria management should consider in determining
whether business activities and environments of an operating segment are similar?
The geographical location of the operations,
the nature of the production process,
distribution methods,
the nature of the regulatory environment, if applicable - ANS The geographical location of the
operations
Which of the following statements is false concerning the number of operating segments that
should be disclosed?
a. at least 75 percent of total company sales made to outsiders should be presented
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
1
, b. even though an operating segment has been reportable in the past and is of continuing
significance, it must meet at least one of the three reporting tests to report separately in the
current year
c. if the 75 percent rule is not met by the results of applying all three reporting tests, additional
segments must be disclosed separately despite their failure to satisfy even one of the three
quantitative thresholds
d. the practical limit to the number of operating segments is 10 - ANS Even though an
operating segment has been reportable in the past and is of continuing significance, it must
meet at least one of the three reporting tests to report separately in the current year
What is the revenue test? - ANS segment revenues, both external and inter-segment, are 10
percent or more of the combined revenue, internal and external, of all reported operating
segments
What is the asset test? - ANS segment assets are 10% or more of the combined assets of all
operating segments
What is the profit or loss test? - ANS segment profit or loss is 10% or more of the larger (in
absolute terms) of the combined reported profit of all profitable segments or the combined
reported loss of all segments incurring a loss
A spot rate may be defined as the - ANS price a foreign currency can be purchased or sold
today (can change)
The forward rate may be defined as - ANS the price today at which a foreign currency can be
purchased or sold in the future
predetermined rate but use someday in the future
Which statement is true regarding foreign currency options?
A. A foreign currency option gives the holder the obligation to buy or sell foreign currency in the
future.
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
2
