Faulk Ltd Has Provided the Following Information -Under the Asset Test Only, Which Segments Are Reportable?
A)Segments

question 39

Multiple Choice

Faulk Ltd. has provided the following information: $$\begin{array} { | c | r | r | r | } \hline \text { Segment } & \text { Assets } & \text { Revenues } & \text { Profits } \\\hline \text { A } & \$ 60,000 & \$ 18,000 & \$ 9,000 \\\hline \text { B } & 120,000 & 90,000 & 3,000 \\\hline \text { C } & 120,000 & 52,500 & 15,000 \\\hline \text { D } & 30,000 & 300,000 & 120,000 \\\hline\end{array}$$
-Under the asset test only, which segments are reportable?

• A)Segments A, B, and C only
• B)Segments A and D only
• C)Segments B and C only
• D)All the segments are reportable.

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Definitions:

Effective Interest Rate Method

The effective interest rate method is a technique for calculating the actual interest rate for a financial product over its life, considering compounding.

Bonds Payable

A long-term liability account that records the face value of the bonds a company is obligated to repay at a specified future date.

Contract Interest Rate

The rate of interest stated in a loan or credit agreement that must be paid on the principal by the borrower.

Bond Discount

The variance in price between the face value of a bond and the amount it fetches on the market, specifically when sold at a price less than the face value.