Which Tests Must a Company Use to Determine Which Operating

question 20

Multiple Choice

Which tests must a company use to determine which operating segments require separate disclosure?

• A) revenue test and asset test.
• B) revenue test, profit or loss test, and asset test.
• C) revenue test and profit or loss test.
• D) profit or loss test and asset test.
• E) revenue test, asset test, and liability test.

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Definitions:

Retail or Professional Service

Refers to businesses that sell goods directly to consumers or provide specialized professional services, respectively.

Load-Distance Analysis

A mathematical technique used in facility layout planning to minimize the weighted distances between departments or areas within a facility.

Distribution Centre

A facility that stores products for relatively short periods of time and redistributes them to retailers or directly to customers.

Centre-of-Gravity Model

A method used in location planning that minimizes transportation costs by considering location, weight, and distance.