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Question 56

Which of the following qualifies as an operating segment?

A.Corporate headquarters, which oversees $1 billion in sales for the entire company.
B.North American segment, whose assets are 12% of the company's assets of all segments, and
management reports to the chief operating officer.
C.South American segment, whose results of operations are reported directly to the chief operating
officer, and has 5% of the company's assets, 9% of revenues, and 8% of the profits.
D.Eastern Europe segment, which reports its results directly to the manager of the European division,
and has 20% of the company's assets, 12% of revenues, and 11% of profits.

Question 57

On January 2, 1989, Union Co. purchased a machine for $264,000 and depreciated it by the straight-line
method using an estimated useful life of eight years with no salvage value. On January 2, 1992, Union
determined that the machine had a useful life of six years from the date of acquisition and will have a
salvage value of $24,000. An accounting change was made in 1992 to reflect the additional data. The
accumulated depreciation for this machine should have a balance at December 31, 1992, of:

A.$176,000
B.$160,000
C.$154,000
D.$146,000

Question 58

An extraordinary item should be reported separately on the income statement as a component of income:

A.Option A
B.Option B
C.Option C
D.Option D

Question 59

The cumulative effect of a change in accounting estimate should be shown separately:

A.On the income statement above income from continuing operations.
B.On the income statement after income from continuing operations and before extraordinary items.
C.On the retained earnings statement as an adjustment to the beginning balance.
D.It should not be recorded separately on any financial statement.

Question 56

Question 57

Question 58

Question 59

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