Which of the Following Tests May Be Used to Determine

question 38

Multiple Choice

Which of the following tests may be used to determine if an industry segment of an enterprise is a reportable segment under FASB Statement No. 131?

• A) Its revenue (both from external customers and internal segments) is equal to or greater than 10 percent of total revenue (external and internal).
• B) The absolute value of its operating profit is equal to or greater than 10 percent of the total of the operating profit for all segments that reported profits (or the total of the losses for all segments that reported losses).
• C) The segment contains 10 percent or more of the combined assets of all operating segments.
• D) All of these.

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Definitions:

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, an indicator of inflation or deflation.

Output Produced

The total quantity of goods and services produced by an economic system during a given period.

Classical Theory

An economic theory advocating for free markets, minimal governmental intervention, and the belief that markets are self-regulating.

Loanable Funds Market

A theoretical market where borrowers and lenders interact, determining the market interest rate based on the supply and demand for loanable funds.