An Entity Is Permitted to Aggregate Operating Segments That Have

question 44

Multiple Choice

An entity is permitted to aggregate operating segments that have similar economic characteristics under certain circumstances. Which of the following circumstances would allow aggregation of Entity A into Segment B?

• A) Entity A is expected to be included in Segment Z, a new segment, in future periods.
• B) Entity A was spun off from Entity C and is now owned directly by the parent entity.
• C) Entity A has recently filed bankruptcy and will be liquidated.
• D) Segment B consists of retail and wholesale operations and Entity A was primarily a retail establishment but is now engaged primarily in rendering services to the parent entity.

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Definitions:

Per-Employee Expenditures

The amount of money spent by an organization for each employee, which can cover salaries, benefits, training costs, and other related expenses.

Employee Productivity

The measurement of the efficiency of an employee or group of employees in producing goods or services.

Flatter Organizational Structures

An organizational model with fewer hierarchical levels, intended to promote better communication and faster decision-making.

Management Functions

Management functions encompass planning, organizing, leading, and controlling organizational resources to achieve strategic goals.