Figure 12-3 Because They Are Difficult to Understand, Analysts Find

question 53

True/False

Figure 12-3 Because they are difficult to understand, analysts find that diagrams like the one in Figure 12-3 are a poor tool for communicating system requirements with users.

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Definitions:

Operating Segments

Components of a business that engage in distinct economic activities, generating revenues and incurring expenses, whose results are reviewed regularly by the entity’s decision-makers.

Consolidated External Revenues

The total revenue generated by a parent company and its subsidiaries, excluding transactions among them, reported in the consolidated financial statements.

Asset Test

A measure used to evaluate whether an entity has enough liquid assets to cover its short-term liabilities, indicating financial stability.

Reportable Segments

Parts of a business that can be separately identified by the products or services they offer or by their geographical areas, and about which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.