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VHINSON - Intermediate Accounting 3 (2023 - 2024 Edition) - 99

The statement of comprehensive income shows an entity's financial performance over time. It includes income and expenses recognized in profit or loss by default. Other comprehensive income items are those explicitly excluded from profit or loss, such as revaluation gains and losses of property, plant, and equipment. Other comprehensive income is combined with profit or loss to determine total comprehensive income. Reclassification of other comprehensive income items between profit or loss and other comprehensive income does not affect total comprehensive income.

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199 views1 page

VHINSON - Intermediate Accounting 3 (2023 - 2024 Edition) - 99

The statement of comprehensive income shows an entity's financial performance over time. It includes income and expenses recognized in profit or loss by default. Other comprehensive income items are those explicitly excluded from profit or loss, such as revaluation gains and losses of property, plant, and equipment. Other comprehensive income is combined with profit or loss to determine total comprehensive income. Reclassification of other comprehensive income items between profit or loss and other comprehensive income does not affect total comprehensive income.

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Alyssa Nacion
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Chapter 3 — Statement of Comprehensive Income

CHAPTER 3: SELF-TEST EXERCISES

True or False
Fi. The statement of comprehensive income shows an entity's financial performance
as ofa pointin time. Peri vef
The financial performance is composed of income and expenses.
The recognition of income may bybe coupled by an increase in the carrying amount of
a liability.
The rece
recognition of expense may be coupled by a derecognition of an asset.
The third step in the five-step model for revenue recognition involves the
determination of the transaction price.
Contributions from owners are included in an entity’s income.
Dividends paid to owners are recorded as dividends expense:
Income and expenses are recognized in profit or loss by default.
Other comprehensive income items are those items of income, gain, expense or
losses that are explicitly excluded from the determination of profit or loss.
. Other comprehensive income is the primary performance metric assessed by the
users of the financial statements.
. Generally, revaluation increase for the items of PPE and intangible items are
reported in otherTt ¢comprehensive i income.
. Remeasurement gains and losses from defined benefit plans are recognized in
profit or loss.
. Ifan entity uses the nature of expense method of presenting expenses, the expense
amounts are allocated to cost of goods sold, selling expenses and administrative
expenses. -
Il othér comprehensive income items may be reclassified to profit or loss.
if a cumulative unrealized gain- OCI is reclassified, the amount of profit or loss will
increase, but the amount ofOCI during the same period will decrease by the same
amount.
F 16. Reclassification of OCI items hasf fo effect i in the total comprehensive income.
7 17.Direct transfers of OCI items to retained earnings will appear in the entity's
statement of comprehensive income.
T 18. The amount of net credit sales may be determined as the product of accounts
receivableEe cept
turnover
IS
and average balance of accounts receivable.
-

Multiple Choice - Theories


1. The financial performance of an entity is determined by the amount/s of
income
op

expenses
contributions by the owners
ca9

distributions to owners
both a and b

82

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