BICSI TE350a-002 Q&A - in .pdf

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NEW QUESTION: 1
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?
I. The segment's assets constitute more than 10% of the combined assets of all operating segments.
II. The segment's liabilities constitute more than 10% of the combined liabilities of all operating segments.
A. Neither I nor II.
B. II only.
C. Both I and II.
D. I only.
Answer: D
Explanation:
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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