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Comprehensive Income quiz #1 Flashcards

Comprehensive Income quiz #1
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  • What is comprehensive income in accounting?
    Comprehensive income is net income plus additional items such as unrealized gains and losses on securities, foreign currency adjustments, and derivatives. It includes complex accounting items not covered in basic courses.
  • How does comprehensive income differ from net income?
    Comprehensive income includes net income plus other unusual or complex items, while net income only reflects revenues minus expenses. Comprehensive income is reported separately and does not affect the net income figure on the income statement.
  • What types of items are typically included in comprehensive income but not in net income?
    Items such as unrealized gains and losses on available-for-sale securities, foreign currency translation adjustments, and changes in the fair value of derivatives are included in comprehensive income but not in net income.
  • Why is the section for other comprehensive income sometimes humorously called the 'trash can of accounting'?
    It is called the 'trash can of accounting' because it collects unusual or complex accounting items that do not fit into the regular income statement, serving as a place for these miscellaneous items.
  • At what stage in accounting education is comprehensive income typically studied in detail?
    Comprehensive income is usually studied in detail in advanced accounting courses, such as the third or fourth accounting class, rather than in introductory courses.
  • What is comprehensive income in accounting?
    Comprehensive income is net income plus additional items such as unrealized gains and losses on securities, foreign currency adjustments, and derivatives.
  • How does comprehensive income differ from net income?
    Comprehensive income includes net income plus other unusual or complex items, while net income only reflects revenues minus expenses.
  • What types of items are typically included in comprehensive income but not in net income?
    Items such as unrealized gains and losses on available-for-sale securities, foreign currency translation adjustments, and changes in the fair value of derivatives are included in comprehensive income but not in net income.
  • Why is the section for other comprehensive income sometimes humorously called the 'trash can of accounting'?
    It is called the 'trash can of accounting' because it collects unusual or complex accounting items that do not fit into the regular income statement.
  • At what stage in accounting education is comprehensive income typically studied in detail?
    Comprehensive income is usually studied in detail in advanced accounting courses, such as the third or fourth accounting class.