AICPA CPA-Financial Exam - Topic 1 Question 103 Discussion

Actual exam question for AICPA's CPA-Financial exam

Question #: 103
Topic #: 1

Opto Co. is a publicly-traded, consolidated enterprise reporting segment information. Which of the following items is a required enterprise-wide disclosure regarding external customers?

AThe fact that transactions with a particular external customer constitute more than 10% of the total enterprise revenues.

BThe identity of any external customer providing 10% or more of a particular operating segment's revenue.

CThe identity of any external customer considered to be 'major' by management.

DInformation on major customers is not required in segment reporting.

Show Suggested Answer

Suggested Answer: B

Choice 'b' is correct. $428,000 net of tax.

by Pok at Nov 15, 2024, 01:37 PM

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Mari

4 months ago

A and B are both important for transparency.

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Lawanda

5 months ago

D seems off, major customers should be disclosed.

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Dalene

5 months ago

Surprised that major customer info isn't mandatory!

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Selma

5 months ago

I think B is more relevant, though.

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Harris

5 months ago

A is definitely required for external customers.

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Evangelina

5 months ago

I’m a bit confused about the specifics, but I think the 10% rule is significant in segment reporting, so maybe A is the right choice?

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Vanna

6 months ago

I feel like we covered this in class, and I vaguely recall that major customer information isn't always required, which makes me think option D could be correct.

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Callie

6 months ago

I think we practiced a similar question where identifying major customers was emphasized, so I might lean towards option B.

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Tiera

6 months ago

I remember we discussed that external customer disclosures are important, but I'm not sure if it's about the 10% revenue threshold or the identity of the customer.

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Argelia

6 months ago

This is a tricky one. I'm a bit confused about the difference between "external customer" and "major customer" disclosures. I'll need to re-read the question and options carefully.

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Pearlene

6 months ago

I've got a good feeling about this one. The wording of the options seems pretty clear, so I'll just need to apply my knowledge of segment reporting requirements.

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Soledad

6 months ago

Okay, I think the key here is that the question is asking about an "enterprise-wide" disclosure, not just for a specific segment. So I'll need to think about that in my analysis.

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Bette

6 months ago

Hmm, I'm not totally sure about this one. The question is asking about a required disclosure, so I'll need to carefully consider each option.

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Gayla

6 months ago

This looks like a straightforward segment reporting question. I'll focus on the key requirements for external customer disclosures.

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Nickie

11 months ago

I'm going with A. Can't go wrong with the 10% rule, am I right?

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Elenore

10 months ago

User 3: Definitely, it's a standard requirement for enterprise-wide disclosure.

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Leonardo

11 months ago

User 2: Yeah, I agree. It's a safe bet to disclose transactions with customers over 10% of total revenues.

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Goldie

11 months ago

User 1: I think A is the right choice, it's always good to follow the 10% rule.

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Verona

11 months ago

Haha, I bet the exam writers are really hoping no one picks D. That would be way too easy!

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Lavonda

12 months ago

D? Really? Information on major customers is not required? That just seems too good to be true.

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Cassie

10 months ago

C) The identity of any external customer considered to be 'major' by management.

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Gaston

10 months ago

B) The identity of any external customer providing 10% or more of a particular operating segment's revenue.

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Blondell

10 months ago

A) The fact that transactions with a particular external customer constitute more than 10% of the total enterprise revenues.

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Cordelia

12 months ago

I'm not sure about this one. I thought B was the right answer, but now I'm second-guessing myself.

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Nathan

12 months ago

I think Onita is correct. It makes sense to disclose the identity of customers providing a significant portion of revenue for a specific segment.

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Onita

1 year ago

I disagree, I believe the answer is B) The identity of any external customer providing 10% or more of a particular operating segment's revenue.

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Ma

1 year ago

I think the correct answer is A. The disclosure of external customers contributing more than 10% of total enterprise revenue is a required enterprise-wide disclosure.

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