Question

Aria evaluates divisional performance based on controllable contribution by segments. Aria has a reportable segment if that segment's revenue exceeds:

1) Sales to unaffiliated customers
2) Intersegment sales of products
3) Interest earned on loans to other industry segments
4) Cannot be determined

Answer 1

Without specific criteria or standards, it cannot be determined which revenue types qualify a segment as reportable for Aria. The correct answer is 'Cannot be determined.'

Step-by-step explanation:

The question pertains to the criteria used for evaluating whether a business segment is reportable according to Aria’s accounting practices. Typically, for a segment to be reportable, its revenue must meet certain quantitative thresholds set by regulatory standards. However, the question does not provide enough information about these specific standards or criteria, which can include a percentage of total revenue, profit, or assets. Therefore, based solely on the information given, the correct answer is 4) Cannot be determined. This is due to the lack of context or additional guidelines in the question regarding Aria’s specific thresholds or criteria for determining reportable segments.