Common Costs

question 53

Multiple Choice

Common costs:

• A)are always traceable to a segment's activities:
• B)are easily related to a segment's activities.
• C)are charged to a company's operating segments when preparing a segmented income statement.
• D)are not charged to a company's operating segments when preparing a segmented income statement.
• E)are not easily related to a segment's activities and are not charged to a company's operating segments when preparing a segmented income statement.

---

Definitions:

Consolidation Process

This refers to the systematic approach of merging and integrating the financial data of multiple entities within a corporation to produce a unified set of financial statements.

Intra-entity Gross Profit

Profits resulting from transactions within or between entities under common control, not recognized in consolidated financial statements until realized externally.

Consolidation Reporting

The financial reporting process that aggregates the results of multiple entities within a single set of statements, reflective of a group as a single economic entity.

Noncontrolling Interest

An ownership interest in a corporation where the stake does not offer majority voting rights, and the interest lies in the shares of subsidiaries not wholly owned by the parent.