One of the Conditions Used to Determine If Two or More

question 4

Multiple Choice

One of the conditions used to determine if two or more operating segments may be aggregated into a single operating segment is:

• A) the segments have the same manager in charge;
• B) the aggregation is deemed to provide useful information for users;
• C) the segments have similar operating results;
• D) the segments have similar methods used to distribute their product or provide their services.

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Definitions:

Full Capacity

The maximum level of output that a company can sustain to make a product or provide a service under normal circumstances.

Operating Capacity

The total output a company can produce using its current resources, under normal working conditions.

Sales

The total amount of a company's revenues generated from the sale of goods or services.

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is kept by the company for reinvestment in its core business or to pay debt.