Which of the following statements concerning departmental (segmental) accounting is true?
A) There is an accounting standard dealing with segment reporting.
B) Segment/departmental information is only produced for use by internal management.
C) Segment/departmental information can only be produced by large organisations.
D) A balance sheet is normally produced for each segment of the business under segmental accounting.

Question

Quizplus · Accepted Answer

There is indeed an accounting standard dealing with segment reporting, known as IFRS 8 (International Financial Reporting Standard 8) or ASC 280 (Accounting Standards Codification 280) for companies operating in the United States. Option B is incorrect as segmental information can also be required by external parties such as regulators and investors. Option C is also incorrect as segmental information can be produced by organizations of all sizes. Option D is incorrect as only an income statement and other performance metrics are typically produced for each segment under segmental accounting, not a balance sheet.

Which of the Following Statements Concerning Departmental (Segmental) Accounting Is