In Monitoring Sales in Market Tests,it Is Important to Recognize

question 39

Multiple Choice

In monitoring sales in market tests,it is important to recognize that a large percentage of first-year factory sales represents:

• A)sales to final customers.
• B)one-time stocking up by channels of distribution.
• C)increased growth of the product category.
• D)increased growth of the product type.

Apply the tests (revenue, profit or loss, assets) to determine which segments must be disclosed separately.

Recognize when additional segments must be disclosed to meet the 75 percent external revenue threshold.

Understand the considerations for identifying operating segments based on internal reporting structures.

Identify which operating segments are reportable under various tests such as the asset test, revenue test, and profit or loss test.

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Definitions:

Management Function

This involves the processes and activities of planning, organizing, leading, and controlling an organization to achieve its objectives.

Establishing Objectives

The process of defining specific, measurable goals that a company or individual plans to achieve.

Planning

The process of setting objectives and determining how to accomplish them.

Managerial Accounting Information

Financial data and reports that are used by a company's management team to make informed operational and strategic decisions.