Opto Co. is a publicly-traded, consolidated enterprise reporting segment information. Which of the following items is a required enterprise-wide disclosure regarding external customers?
Answer(s): A
Choice "a" is correct. In order to conform to GAAP, financial statements for public business enterprises must report segment information about a company's major customers if that customer provides 10% or more of the combined revenue, internal and external, of all operating segments. Choice "b" is incorrect. Revenue is 10% of ALL operating segments not "a particular" segment. Choice "c" is incorrect. Disclosure is not at management's discretion.Choice "d" is incorrect. Disclosure is required.
Which of the following qualifies as an operating segment?
Answer(s): B
Choice "b" is correct. Assets of the North American segment exceed 10% combined assets of all operating segments.Choice "a" is incorrect. Corporate headquarters in not considered a segment. Choice "c" is incorrect. The South American segment does not meet any of the 10% minimums (Revenue, P&L or Assets).Choice "d" is incorrect. Eastern Europe segment does not report to the chief operating officer.
Which of the following should be disclosed for each reportable operating segment of an enterprise?
Choice "a" is correct. For each reportable segment of an enterprise, both profit or loss and total assets should be disclosed. In disclosure questions, if you are not sure, disclose the most rather than the least.Choice "b" is incorrect. For each reportable segment of an enterprise, both profit or loss and total assets should be disclosed.Choice "c" is incorrect. For each reportable segment of an enterprise, both profit or loss and total assets should be disclosed.Choice "d" is incorrect. For each reportable segment of an enterprise, both profit or loss and total assets should be disclosed.
Which of the following factors determines whether an identified segment of an enterprise should be reported in the enterprise's financial statements under SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information?
Choice "a" is correct. For segment reporting, if an identified segment's assets constitute more than 10% of the combined assets of all operating segments, the segment should be reported. The same rule does not apply for the segment's liabilities. The candidate does have to remember the 10% and also the 10% of "what."Choice "b" is incorrect. For segment reporting, if an identified segment's assets constitute more than 10% of the combined assets of all operating segments, the segment should be reported. The same rule does not apply for the segment's liabilities.Choice "c" is incorrect. For segment reporting, if an identified segment's assets constitute more than 10% of the combined assets of all operating segments, the segment should be reported. The same rule does not apply for the segment's liabilities, so the correct answer cannot be "Both." Choice "d" is incorrect. For segment reporting, if an identified segment's assets constitute more than 10% of the combined assets of all operating segments, the segment should be reported. The correct answer cannot be "Neither."
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Venkatesh Aiyar commented on September 23, 2024 I will be taking this exam in early December. If anyone has taken or passed this exam recently, please let me know what I should focus on other than the usual suspects such as consolidation, cash flow etc. UNITED STATES upvote
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