When Defining a Reportable Segment, Which of the Following Conditions

question 46

Multiple Choice

When defining a reportable segment, which of the following conditions would be sufficient to allow a company to combine two operating segments for purposes of testing?

• A) The products sold by each segment are produced in the same plant.
• B) Both segments have several customers in common.
• C) The segments may sell different products, but they have a similar production process.
• D) Both segments are required to adhere to U.S. Department of Labor regulations regarding immigration laws.
• E) Both segments are owned by the same parent company.

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Definitions:

Perpetual Inventory System

An inventory tracking system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Merchandise Inventory

Finished goods held for sale by a company in the ordinary course of business; also known as stock-in-trade.

Bank Credit Card Sales

Transactions in which the purchase is made using a bank-issued credit card, processed through the banking network.

Credit Card Expense

Charges and fees incurred from the use of a credit card, including purchases, cash advances, and interest charges.