Which of the Following Is Not a Consideration in Segment

question 40

Multiple Choice

Which of the following is not a consideration in segment reporting for diversified enterprises?

• A) Allocation of joint costs
• B) Transfer pricing
• C) Defining the segments
• D) Consolidation policy

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Definitions:

Comparative Advantage

The capability of a person, business, or nation to generate a product or offer a service with a lesser opportunity cost compared to its rivals.

Absolute Advantage

The ability of an individual, company, or country to produce more of a good or service with the same amount of resources as others.

Production Possibilities

Production possibilities involve the various combinations of different goods or services that can be produced in a given economy with available resources and technology, illustrated by the production possibilities frontier.

Production Possibilities Curve

A graphical representation that shows the various combinations of two products that an economy can produce using all its resources efficiently.