Which of the following statements about an operating segment is true? A. An oper

Question

Which of the following statements about an operating segment is true?

A. An operating segment does not have to provide a balance sheet, only an income statement to be considered as such.

B. An operating segment engages in business activities from which it may earn revenues and incur expenses, but may not actually be earnings revenues or incurring expenses at this point in time.

C. An operating segment's operating results do not need to be reviewed by the chief operating decision maker as long as they are reviewed by department managers in making their business decisions.

D. An operating segment engages in business activities from which it may earn revenues and incur expenses, and must be earnings revenues or incurring expenses at this point in time.

Explanation / Answer

AN OPERATING SEGMENT ENGAGES IN BUSINESS ACTIVITIES FROM WHICH IT MAY EARN REVENUES AND INCUR EXPENSES, AND MUST BE EARNINGS REVENUES OR INCURRING EXPENSES AT THIS POINT IN TIME.

THIS STATEMENT IS TRUE, BECAUSE AN OPERATING SEGMENT MAY HAVE REVENUE AND EXPENSES BUT THAT MUST BE BELONGS TO THAT POINT OF TIME IN WHICH THE REPORTING IS TO BE DONE.

OPTION D

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