Income Statement pg 97-106

Question 1

Exceptions to All Inclusive Income Rule

Answer 1

Prior Period Adjustments & Other Comprehensive Income Items & Retrospective Changes in Acct Principle affecting income (treated as direct adjustments to retained earnings)

Question 2

Other Comprehensive Income

Answer 2

1. Foreign currency translation adjustments
2. Unrealized holding gains and losses on securities available for sale
3. Pension and other post-retirement benefit plan cost adj
4. Certain deferred derivative gains and losses

Question 3

Accounting Income

Answer 3

Revenues-Expenses+Gains-Loses

• -Changes in Market Value are not recognized until substantiated by transaction b/w willing parties
  - -Investments w. readily determinable market values are exceptions (Trading Securities, Securities Avail for sale)

Question 4

Economic Income

Answer 4

Change in net worth (Fair market value net assets) of business enterprise during acct period
**Net Value Net Assets Jan 1+Net Income for Period+Owner Investments-Dividends and Stock Repurchases=Market Value Dec 31

Question 5

Income Statement Structure

Answer 5

Top Portion: Routinely Occurring items and other items included in income from continuing operations
Bottom Portion: Items specifically defined by GAAP as being unrelated to continuing operations–Discontinued operations, extraordinary items (unusual and infrequent)

Question 6

Income Statement Sample

Answer 6

Pg 99 FAR part 1

Question 7

Multiple Disclosures - Intraperiod tax allocation items

Answer 7

INTRAperiod tax refers to tax only for one yr–contrasts to INTERperiod tax records period tax in current taxes payable and deferred tax accts

1. Discontinued Operations & Extraordinary Items-on IS
   2 .Other Comprehensive Income Items-on special OE acct called Accumulated other Comprehensive Income
2. Adj for retroactive acct principle changes & Prior Period Adj–RE Statement