An Important Argument for Providing Segmental Information in the Financial

question 25

Multiple Choice

An important argument for providing segmental information in the financial reports is:

• A) It is simpler and easier for users to follow.
• B) Consolidated information is so aggregated that it may disguise poor performance and very good performance among segments of the entity.
• C) The shareholders of the individual companies in the group can use the segment information to assess the performance of their company.
• D) The segments of the entity will be taxed separately on their earnings.
• E) None of the given answers.

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Definitions:

Return on Investment

A measure used to evaluate the efficiency of an investment, calculated as the return (profit) of an investment divided by the cost of the investment.

Division

A section or branch of a company that operates semi-autonomously, focusing on a particular product line, market segment, or geographical area.

Managerial Performance

Evaluation of the effectiveness with which managers achieve organizational goals and utilize resources efficiently and effectively.

Cosmetics Division

A specialized department or sector within a company focused on the production and sale of beauty, skincare, and personal care products.