Comprehensive income can be disclosed in various formats. Which of the following is an acceptable format for disclosing comprehensive income?I. At the bottom of the income statement, continue from net income and add other comprehensive income to arrive at comprehensive income for the year.II. In a separate statement, start with net income and add other comprehensive income to arrive at comprehensive income for the year.III. In the statement of stockholders’ equity, net income is adjusted for other comprehensive income to arrive at comprehensive income for the year.IV. After retained earnings in the stockholders’ equity section of the statement of financial position, start with net income and add other comprehensive income to arrive at comprehensive income for the year.

Answered: Comprehensive income can be disclosed…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Comprehensive income can be disclosed in various formats. Which of the following is an acceptable format for disclosing comprehensive income?

I.		At the bottom of the income statement, continue from net income and add other comprehensive income to arrive at comprehensive income for the year.
II.		In a separate statement, start with net income and add other comprehensive income to arrive at comprehensive income for the year.
III.		In the statement of stockholders’ equity, net income is adjusted for other comprehensive income to arrive at comprehensive income for the year.
IV.		After retained earnings in the stockholders’ equity section of the statement of financial position, start with net income and add other comprehensive income to arrive at comprehensive income for the year.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

Step 1

Comprehensive income:

The sum of regular and other comprehensive income is referred to as comprehensive income. The comprehensive income provides a more clear picture regarding the company's earnings and revenues.

Unrealized gains or losses from the following listed below are included in other comprehensive income:

Derivative financial instruments
Cash flow hedges
Foreign currency transactions
Debt securities

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