Which Statement Is True About the Computation of Net Income

question 82

Multiple Choice

Which statement is true about the computation of net income and comprehensive income?

• A) They are the same under either reporting alternative.
• B) The one statement format provides a higher net income than the two consecutive statements format.
• C) The two consecutive statements format provides a higher net income than the one statement format.
• D) Net income always equals comprehensive income under the one statement format.

---

Definitions:

Employee's Portion

The part of payroll taxes and other deductions that employees are responsible for, which is withheld from their wages.

Taxes

Financial charges imposed by a government on individuals, corporations, and transactions to fund public spending and services.

Prepaid Workers' Compensation Insurance

An asset account that represents insurance payments made in advance for workers' compensation, which provides coverage for employee injuries on the job.

Workers' Compensation

Insurance providing wage replacement and medical benefits to employees injured in the course of employment.