AICPA Exam CPA-Financial Topic 3 Question 63 Discussion

Actual exam question for AICPA's CPA-Financial exam

Question #: 63
Topic #: 3

The following information pertains to Aria Corp. and its divisions for the year ended December 31, 1988:

Aria and all of its divisions are engaged solely in manufacturing operations. Aria has a reportable segment if that segment's revenue exceeds:

A$264,000

B$260,000

C$204,000

D$200,000

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. $260,000 represents a reportable segment (10% of total sales):

Rule: To be significant enough to report on, a segment must be at least 10% of:

1. Combined revenues (whether intersegment or unaffiliated customers), or

2. Operating income, or

3. Identifiable assets.

by Cheryl at Dec 28, 2022, 06:02 PM

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