Question 1

To qualify as an operating segment, an entity need satisfy only one of the three 10% or more quantitative thresholds tests.

Accepted Answer

The answer of To qualify as an operating segment, an...

Question 2

All reportable segments are operating segments but not all operating segments are reportable segments.

Accepted Answer

Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Not all operating segments meet the quantitative thresholds for reporting purposes, hence not all operating segments are reportable, but all reportable segments must be operating segments.

Question 3

All operating segments are reportable segments but not all reportable segments are operating segments.

Accepted Answer

Operating segments are parts of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Not all operating segments meet the quantitative thresholds for determining reportable segments, and there are specific criteria that an operating segment must meet to be considered a reportable segment. Conversely, all reportable segments are operating segments that have met these criteria, making the initial statement incorrect.

Question 4

Aggregation of segments is allowed only if the 75% test is satisfied.

Accepted Answer

Aggregation of segments is allowed under certain conditions in financial reporting and tax compliance, but the 75% test specifically refers to a rule in U.S. tax code for Real Estate Investment Trusts (REITs), which requires at least 75% of a REIT's income to come from certain real estate sources. The concept of segment aggregation in financial reporting (e.g., under IFRS 8 or ASC 280 for operating segments) involves criteria such as similarity in economic characteristics, nature of products and services, and production processes, rather than a percentage-based test.

Question 5

More than one segment may operate in the same geographic area and one segment may include operations in several geographic areas.

Accepted Answer

Segments are parts of a business that can be defined by the products they offer or the regions they operate in, allowing for overlap in geographic areas and for a single segment to span multiple areas.

Question 6

A company manufacturing widgets both domestically and overseas could have two reportable segments.

Accepted Answer

A company could have two reportable segments if the operations in domestic and overseas markets have distinct financial results, risks, and returns, which would require separate reporting under financial reporting standards.

Question 7

In disclosing information about major customers, it is necessary to disclose the identity of each such customer.

Accepted Answer

While companies must disclose information about major customers in terms of their financial impact, they are not required to disclose the specific identities of these customers due to confidentiality and competitive reasons.

Question 8

_____ FAS 131 defines an operating segment as a component of an enterprise that has:

Accepted Answer

The answer of _____ FAS 131 defines an operating segment...

Question 9

_____ To qualify as an operating segment under FAS 131, a component of an enterprise must

Accepted Answer

Under FAS 131, an operating segment must engage in business activities from which it may earn revenues and incur expenses, including transactions with other components of the same enterprise.

Question 10

_____ A component of a vertically integrated operation

Accepted Answer

A component of a vertically integrated operation can be a separate operating segment if it earns revenues and incurs expenses, and its operating results are regularly reviewed by the entity's chief operating decision maker. It can also be a reportable segment if it meets quantitative thresholds outlined in financial reporting standards. Therefore, none of the provided statements are universally correct.

Question 11

_____ Which of the following items are not required to be disclosed for reportable operating segments even though the items are included in the measure of profitability used by the CODM in managing segments?

Accepted Answer

The answer of _____ Which of the following items are...

Question 12

_____ Which of the following items does FAS 131 require to be included in the measure of profitability used by the CODM in managing segments?

Accepted Answer

FAS 131 does not specify particular items to be included in the measure of profitability; it requires that the measure used by the CODM (Chief Operating Decision Maker) in managing segments be disclosed, which may vary by company.

Question 13

_____ Which of the following items does FAS 131 require to be excluded from the measure of profitability to be disclosed for reportable segments?

Accepted Answer

The answer of _____ Which of the following items does...

Question 14

_____ Which amounts does FAS 131 require to be disclosed for each reportable segment?

Accepted Answer

The answer of _____ Which amounts does FAS 131 require...

Question 15

_____ Which separate segment amounts does FAS 131 require to be disclosed for each reportable segment when the amounts are used in the measure of segment profitability used by the CODM?

Accepted Answer

The answer of _____ Which separate segment amounts does FAS...

Question 16

_____ Which separate segment amounts does FAS 131 require to be disclosed for each reportable segment even though the amounts are not used in the measure of segment profitability used by the CODM?

Accepted Answer

The answer of _____ Which separate segment amounts does FAS...

Question 17

_____ Under FAS 131, revenues could include:

Accepted Answer

Under FAS 131, revenues can include all types of intersegment revenues such as interest income, lease income, management fee income, and royalty income. This standard allows for a broad interpretation of what constitutes revenue within an entity, including transactions among different segments of the same entity.

Question 18

_____ The revenues to be disclosed for identified operating segments do not include

Accepted Answer

Intrasegment sales are not included in the revenues to be disclosed for identified operating segments. This is because intrasegment sales are sales between different segments of the same company, and therefore do not represent external revenue.

Question 19

_____ The 10% revenues test used to determine reportable segments uses a revenues amount that includes

Accepted Answer

The 10% revenues test for determining reportable segments includes all sources of revenues that the segment earns, which encompasses intersegment sales, intersegment interest income, and external interest income. This comprehensive approach ensures that the segment's total contribution to the company's revenue is accurately assessed.

Question 20

_____ The revenue amounts for a reportable segment that are included in the revenues amount used in the revenues test used to determine reportable segments

Accepted Answer

BThe revenue amounts for a reportable segment included in the revenue test may not always match the disclosed revenue amounts for that segment. This discrepancy can occur because the revenue test might include certain revenues that are not required to be disclosed in segment reporting, or conversely, the disclosed amounts might include additional details not considered in the revenue test.

Quiz 12: Reporting Segment and Related Information

To qualify as an operating segment, an entity need satisfy only one of the three 10% or more quantitative thresholds tests.

All reportable segments are operating segments but not all operating segments are reportable segments.

All operating segments are reportable segments but not all reportable segments are operating segments.

Aggregation of segments is allowed only if the 75% test is satisfied.

More than one segment may operate in the same geographic area and one segment may include operations in several geographic areas.

A company manufacturing widgets both domestically and overseas could have two reportable segments.

In disclosing information about major customers, it is necessary to disclose the identity of each such customer.

_____ FAS 131 defines an operating segment as a component of an enterprise that has:

_____ To qualify as an operating segment under FAS 131, a component of an enterprise must

_____ A component of a vertically integrated operation

_____ Which of the following items are not required to be disclosed for reportable operating segments even though the items are included in the measure of profitability used by the CODM in managing segments?

_____ Which of the following items does FAS 131 require to be included in the measure of profitability used by the CODM in managing segments?

_____ Which of the following items does FAS 131 require to be excluded from the measure of profitability to be disclosed for reportable segments?

_____ Which amounts does FAS 131 require to be disclosed for each reportable segment?

_____ Which separate segment amounts does FAS 131 require to be disclosed for each reportable segment when the amounts are used in the measure of segment profitability used by the CODM?

_____ Which separate segment amounts does FAS 131 require to be disclosed for each reportable segment even though the amounts are not used in the measure of segment profitability used by the CODM?

_____ Under FAS 131, revenues could include:

_____ The revenues to be disclosed for identified operating segments do not include

_____ The 10% revenues test used to determine reportable segments uses a revenues amount that includes

_____ The revenue amounts for a reportable segment that are included in the revenues amount used in the revenues test used to determine reportable segments