A segment of a business enterprise is to be reported separately when the revenues of the segment exceed 10 percent of the
A) total combined revenues of all segments reporting profits.
B) total revenues of all the enterprise's industry segments.
C) total export and foreign sales.
D) combined net income of all segments reporting profits.

Question

Quizplus · Accepted Answer

A segment of a business enterprise is to be reported separately when the revenues of the segment exceed 10 percent of the total revenues of all the enterprise's industry segments. This is known as the "10% test" and is used to identify reportable segments for financial reporting purposes. If a segment meets this criteria, it is considered to be a significant portion of the company's operations and should be reported separately to provide more detailed information to investors and stakeholders.

A Segment of a Business Enterprise Is to Be Reported