Operating Segment
whose function is “to allocate resources to the segments and assess their performance.”
chief operating decision maker
Income is recognized when cash is received and expense is recognized when paid with cash.
Cash Basis
The primary form of record keeping in a single entry system is the
cash book
What is the overall size test for external revenues to be classified as reportable segment?
75%
Income is recognized when earned regardless of when received and expense is recognized when incurred regardless of when paid.
Accrual basis
The single entry system is centered on the results of a business that are reported in the
income statement.
When shall an operating segment be considered as reportable segments?
10% of revenue. profit or loss, assets
Items incurred are treated as expenses regardless of when paid
ACCRUAL BASIS
The single entry method of determining net income or loss is also known as “net asset approach” or
“capital maintenance approach.”
Two or more operating segments may be aggregated into a __________ if the segments have similar economic characteristics and the segments share a majority of a criteria
single operating segment
Items received are considered as income regardless of when earned
Cash basis
The very heart of accounting process is the analysis of the dual effect of each transaction on the basic accounting model
“Assets = Liabilities + Capital.”
There may be practical limit to the number of reportable segments to be disclosed separately by an entity beyond which segments information may
become too detailed.
already received but not yet earned.
Deferred income
All transactions are normally analyzed and recorded in terms of debits and credits the system is called the
double entry system