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:

Outstanding Corporate Stock

Shares of a corporation that have been issued and are currently owned by shareholders.

Articles of Incorporation

Legal document filed with a governmental body to legally establish a corporation, detailing its structure, purpose, and regulations.

Certificate of Organization

A legal document filed with a state government to officially form a limited liability company (LLC) within that state.

Corporate Prospectus

A formal document that companies issue to potential investors, detailing the financial health, risks, and objectives of the company, often in the context of a public stock offering.