When an income statement shows data for segments of the organization, and data for each segment are added together to get totals for the whole organization:
A)all expenses should be allocated to the segments.
B)common fixed expenses should be allocated to the segments.
C)only direct revenues and direct expenses should be assigned to segments.
D)direct fixed expenses should be subtracted as one amount in the "total" column.

Question

Quizplus · Accepted Answer

Only direct revenues and direct expenses should be assigned to segments to accurately reflect the performance of each segment without arbitrary allocations of common expenses.

When an Income Statement Shows Data for Segments of the Organization