_____ An entity that operates in several industries has (a) external sales of $40,000,000, (b) intrasegment sales of $3,000,000, and (c) intersegment sales of $7,000,000. In performing the 75% test, the 75% is applied to
A) $3,000,000
B) $40,000,000
C) $43,000,000
D) $47,000,000
E) $50,000,000

Question

Quizplus · Accepted Answer

The 75% test is applied to external sales, which in this case amount to $40,000,000. This figure represents the entity's sales to external customers, which is the relevant measure for determining reportable segments under accounting standards.

_____ an Entity That Operates in Several Industries Has (A)