Which of the following should be disclosed for each reportable operating segment of an enterprise?
Answer(s): A
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."
Which of the following types of entities are required to report on business segments?
Choice "b" is correct. Only publicly-traded enterprises are required to report on business segments. Choices "a", "c", and "d" are incorrect, per the above.
In financial reporting of segment data, which of the following must be considered in determining if an industry segment is a reportable segment?
Choice "a" is correct. A segment is considered reportable if its reported revenue, including sales to unaffiliated customers and intersegment sales, is 10% or more of the combined revenue (unaffiliated and intersegment) of all operating segments.Choices "b", "c", and "d" are incorrect, per the above .Development-Stage Enterprises
A development stage enterprise should use the same generally accepted accounting principles that apply to established operating enterprises for:
Choice "a" is correct. Development stage enterprises must use all the same principles as established enterprises including those of revenue recognition and deferral of expenses. The primary difference is that development stage enterprises must provide additional disclosures not required of established operating enterprises. SFAS #7, para. 10
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