Reporting by segments of a business is believed to have a number of advantages.Which of the following is not likely to be such an advantage?
A) Allowing better assessment of expected returns from and risks of investing
B) Preventing management from hiding failures in decision making
C) Increasing the net profit of a business
D) Improving investors' decision making

Question

Quizplus · Accepted Answer

Reporting by segments would provide better assessment of expected returns from and risks of investing which would lead to more informed and efficient investment decisions. It would also prevent management from hiding failures in decision making and improve investors' decision making by giving them more transparency and insight into the company's operations. However, reporting by segments would not directly increase the net profit of a business but rather provide a more accurate picture of the profitability of each segment.

Reporting by Segments of a Business Is Believed to Have