Describe comprehensive income, net income, and other comprehensive income
COMPREHENSIVE INCOME, NET INCOME, AND OTHER COMPREHENSIVE INCOME
Comprehensive income equals the net amount of revenues, expenses, gains, and losses during
an accounting period. Authoritative guidance classifies revenues and expenses arising from a
firm's core business as components of net income. Net income also includes gains and losses
from sales or exchanges of assets or settlements of liabilities related incidentally or peripherally to the firm's core business. Authoritative guidance classifies gains and losses from the remeasurement of certain assets and liabilities as either net income or other comprehensive income. However, neither the FASB's conceptual framework nor the IASB's conceptual framework contains a conceptual model for classifying items in net income versus in other comprehensive income. Firms reclassify gains and losses initially classified in other comprehensive income into net income when a confirming event subsequently occurs. Firms close amounts in other comprehensive income for a period to Accumulated Other Comprehensive Income at the end of the period.
Accumulated Other Comprehensive Income is a shareholders' equity account that acts for other comprehensive income the way retained earnings acts for net income. Comprehensive income for a period equals net income plus other comprehensive income.
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Fill in the blank(s) with the appropriate word(s).
Answer the following statements true (T) or false (F)
Whenever possible, flexibility should be used in formulating accounting policy.
Which of the following is a stakeholder for a local business retail store?
A. product suppliers B. neighboring businesses C. the local newspaper D. the City Council
Which of the following laws establishes the standards and procedures federal administrative agencies must follow in their rulemaking and adjudicative functions?
A) Federal Procedure Act B) Administrative Procedure Act C) Congressional Review Act D) Small Business Regulatory Enforcement Fairness Act