Statement of Comprehensive Income Flashcards
What is the purpose of reporting comprehensive income?
a. To replace net income with a better measure
b. To report a measure of overall enterprise performance
c. To report changes in equity due to transactions with owners
d. To combine income from continuing operations and extraordinary items
b. To report a measure of overall enterprise performance
Which of the following methods are acceptable for reporting comprehensive income under PFRS? I. One comprehensive income statement II. Two statements: an income statement and a comprehensive income statement III. In the statement of owner’s equity a. I only b. I and II c. I and III only d. I, II and III
b. I and II
In a statement of comprehensive income, profit is equal to the total comprehensive income
a. Always
b. Only if expenses are classified by nature
c. Only if there are no reclassification adjustments
d. Only if an entity has no item of other comprehensive income
d. Only if an entity has no item of other comprehensive income
Profit + Other Comprehensive Income
a. No meaningful amount
b. Total comprehensive income
c. Total equity
d. Total net performance
b. Total comprehensive income
Conventionally, accounts measure income
a. By using a transaction approach
b. By applying a value-added concept
c. As a change in the value of shareholder’s equity
d. As a change in the purchasing power of the equity
a. By using a transaction approach
Accounting income is a concept in which
a. Market values adjusted for the effects of inflation or deflation are used to calculate real wealth
b. Income equals the change in the market value of the firm’s outstanding common stock for the period
c. The transactions approach is used to record income and expenses throughout the reporting period
c. The transactions approach is used to record income and expenses throughout the reporting period
Unrealized loss in this type of investment is presented in the statement of comprehensive income
a. Trading securities only
b. Available-for-sale securities only
c. Trading and available-for-sale securities
d. Trading, available-for-sale and held to maturity securities
c. Trading and available-for-sale securities
Which is not included in the category is comprehensive income of an accounting entity?
a. Net income for the period
b. Gain on sale of treasury stock
c. Change in revaluation surplus
d. Increase in value of investment property
b. Gain on sale of treasury stock
Which financial statement is superseded by the Statement of Comprehensive Income as a basic component of general-purpose financial statements?
a. Balance sheet
b. Income statement
c. Statement of cash flows
d. Statement of changes in equity
b. Income statement
The single step income statement emphasizes
a. The gross profit figure
b. Total revenues and total expenses
c. The various components of income from continuing operations
d. Accounting changes more than these emphasized in the multi-step income
b. Total revenues and total expenses
When an entity opts to present the income statement classifying expenses by function, which of the following is not required to de disclosed as “additional information”?
a. Amortization expense
b. Depreciation expense
c. Director’s remuneration
d. Employee benefits expense
c. Director’s remuneration
Which is not considered in computing profit or loss?
a. Distribution costs
b. Financing charges
c. Revaluation surplus
d. Sales related to parties
c. Revaluation surplus
Large Corporation prepares its financial statements in accordance with PFRS. Which of the following items are required disclosures on the income statement?
a. Finance costs, tax expense and income
b. Gross profit, operating profits and net profits
c. Revenues, cost of goods sold and advertising expense
d. Operating expense, non-operating expenses and extraordinary items
a. Finance costs, tax expense and income
The profit or loss of a period and the other gains and losses recognized directly in equity are presented in the
a. Income statement
b. Statement of cash flows
c. Statement of changes in equity
d. Statement of financial position
a. Income statement
Which of the following components of other comprehensive income should not be recycled to profit or loss?
I. Change in revaluation surplus
II. Changes in fair value of “AFS” financial assets
III. Actuarial gains and losses on defined benefit plan
IV. Gains and losses arising from translating the financial statements of foreign operations
a. I and II only
b. I and III only
c. I, II and III only
d. I, II, III and IV only
b. I and III only
