An Enterprise Has Eight Reporting Segments

question 36

Multiple Choice

An enterprise has eight reporting segments.Five segments show an operating profit and three segments show an operating loss.In determining which segments are classified as reporting segments under the operating profits test,which of the following statements is correct?

• A)The test value for all segments is 10% of consolidated net profit.
• B)The test value for profitable segments is 10% or more of those segments reporting a profit,and the test value for loss segments is 10% or more of those segments reporting a loss.
• C)The test value for loss segments is 10% of the greater of (a)the absolute value of the sum of those segments reporting losses,or (b)10% of consolidated net profit.
• D)The test value for all segments is 10% of the greater of (a)the absolute value of the sum of those segments reporting profits,or (b)the absolute value of the sum of those segments reporting losses.

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Definitions:

Appreciates

Refers to an increase in the value of an asset or currency against other currencies or assets.

Depreciates

A decline in the value of an asset over time due to wear and tear, obsolescence, or market conditions.

British Pound

The official currency of the United Kingdom, also known as GBP or Sterling.

Exchange-rate Systems

These are frameworks established by countries to govern how their currencies exchange with one another, including floating, fixed, and pegged exchange rates.