Question

1. What is the intent of the Security and Exchange Staff Accounting Bulletins?

A. To disseminate rules of the SEC

B. To provide Interpretations of the SEC

C. They are publications bearing the SEC's official approval.

D. They are practices followed by the chief accountant of the SEC.

2. What item(s) should not be included in interim reports?

A. Cumulative effect of a change in accounting principle

B. Significant changes in financial position

C. Changes in accounting estimates

D. None of the foregoing

3. Regarding costs that benefit multiple periods, which of the following statements is not correct?

A. Quantity discounts should be recognized in the interim period, even if the annual purchase level has not yet been made if the company expects that the annual sales volume will be sufficient for the customer to receive the discount.

B. Advertising expenses should be allocated over the interim reporting periods that benefit from the expenditure, even if paid in only one reporting period.

C. Bonus payments based on sales targets should only be recognized in the period in which the target is met or exceeded.

D. The estimated annual cost of property taxes, if they can be reliably estimated, should be apportioned equally to interim reporting periods.

4. Operating segments are best described in the following manner:

A. If an operating segment was separately reported in a previous year, it must be reported that way in the current year even if it no longer meets the criteria for reportability.

B. If an operating segment is reported separately in the current period, prior-period segment data presented for comparative purposes must be restated to include that segment even if that segment did not satisfy the criteria for reportability.

C. The determination of the reportability of a segment is made each year. Segments can be included or excluded each year, depending on the results of the reporting tests.

D. Both a and b are (True).

5. What type of disclosures relating to major customers must be made?

A. Companies must disclose information about the extent of their reliance on major customers if revenues from transactions with a single external customer amount to 5% or more of the company’s total revenues

B. Companies must disclose information about the extent of their reliance on major customers if revenues from transactions with a single external customer amount to 10% or more of the company’s total revenues.

C. Companies must disclose information about the extent of their reliance on major customers if revenues from transactions with a single external customer amount to 15% or more of the company’s total revenues.

D. Companies must disclose information about the extent of their reliance on major customers if revenues from transactions with a single external customer amount to 20% or more of the company’s total revenues.

Answer 1

Question 1:-

The intent of Security and exchange staff accounting bulletin. The correct answer is Option D - They are practices followed by the Chief Accountant of the SEC. Security and exchange staff accounting bulletins are the summarizations of SEC's staff on how to apply generally accepted accounting principles. These are used by the Chief accountant of the SEC.

Option A & Option B are incorrect because the Security and exchange staff accounting bulletins neither function to disseminate the rules of the SEC nor to provide interpretations of the SEC.

Option C is also incorrect because they are not published as bearing the commission's official approval.

Kindly request you to post the remaining questions separately so that we can answer them as well. All the best and please let me know if you have any questions via comments :)