GAAP Requires That Segment Information Be Reported

question 25

Multiple Choice

GAAP requires that segment information be reported

• A)by geographics,without regard to size of the segment.
• B)by geographics,without regard to industry or product-line.
• C)however management organizes the enterprise into units for internal decision-making and performance-evaluation purposes.
• D)by industry or product-line,without regard to geographics.

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Definitions:

Cycle Inventories

are stocks that companies maintain to smoothly handle the fluctuations in production and sales, minimizing stockouts and overstock situations.

Setups

The preparation and adjustments made to machinery or equipment before a production run or the execution of a particular job.

Economic Order Quantity

A calculation used to determine the most efficient order size that minimizes the sum of ordering and holding costs associated with inventory management.

Holding Costs

Expenses associated with storing inventory, including warehouse storage fees, insurance, and spoilage costs, until the inventory is sold or used.