An Important Argument for Providing Segmental Information in the Financial

question 23

Multiple Choice

An important argument for providing segmental information in the financial reports is:

• A) It is simpler and easier for users to follow.
• B) Consolidated information is so aggregated that it may disguise poor performance and very good performance among segments of the entity.
• C) The shareholders of the individual companies in the group can use the segment information to assess the performance of their company.
• D) The segments of the entity will be taxed separately on their earnings.

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Definitions:

Consumer Surplus

The disparity between the total cost consumers are inclined and able to bear for a good or service and the total cost they actually bear.

Consumer Surplus

The economic benefit consumers receive when they pay a price below what they were willing to pay, reflecting consumer satisfaction in economic transactions.

Consumer Surplus

The disparity between the ideal payment consumers are ready to make for a good or service and the real amount paid.

Total Expenditure

The overall amount of money spent by individuals, households, or an economy on goods and services over a specific period of time.