AS 17 - Segment Reporting MCQ

Question 1

1. As per AS 17, reportable segments are those whose total revenue from external sales and inter-segment sales is

B) 10% or more of the total revenue of all external segments

C) 12% or more of the total revenue of all segments

D) 12% or more of the total revenue of all external segments

Answer

A) 10% or more of the total revenue of all segments ✓

Question 2

2. Which of the following statements is correct?

A) Management has a discretion to include a segment as a reportable segment even if it passes the 10% materiality test.

B) Management has a discretion to include any segment as a reportable segment if it fails the 12% materiality test.

D) It is not mandatory for the management to include the segment as a reportable segment if it passes the 10% materiality test.

Answer

C) It is mandatory for the management to include the segment as a reportable segment if it passes the 10% materiality test. ✓

Question 3

3. Which of the following statements is correct?

B) The overall test of 75% considers only internal revenue to compute the threshold limit.

C) The overall test of 75% considers both internal and external revenue to compute the threshold limit.

D) It is management choice whether they want to include both external and internal revenue for computing threshold limit.

Answer

A) The overall test of 75% considers only external revenue to compute the threshold limit. ✓

Sample Questions: AS 17 - Segment Reporting