The Segment Return on Assets

question 92

Multiple Choice

The segment return on assets:

• A) Reflects on the profitability of a segment.
• B) Is difficult to calculate because companies with traded stock are not required to report segment information.
• C) Is applicable whether segments earn profits or losses.
• D) Is calculated as segment sales divided by segment average assets.
• E) Is calculated as segment average assets divided by segment operating income.

Understand the difference between multiple-step and single-step income statements.

Identify and classify different types of expenses and losses.

Understand the composition and calculation of net income.

Recognize how inventory is classified in financial statements.

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Definitions:

Population Standard Deviation

A measure of the dispersion or spread of a set of data points in a population, showing how much variation exists from the average.

Square Root

A mathematical function that produces the original number when multiplied by itself.

Null Hypothesis

A hypothesis that suggests there is no significant difference between specified populations, any observed difference being due to sampling or experimental error.

Standard Error of the Mean

A statistical measure that estimates the sampling variability of the mean from different samples drawn from the same population.