Which of the Following Is an Advantage of the Two-Statement

question 88

Multiple Choice

Which of the following is an advantage of the two-statement approach to reporting other comprehensive income (OCI) ?

• A) Net income retains its emphasis as the primary income measure.
• B) Other comprehensive income is more heavily emphasized when presented in its own statement.
• C) Companies apply the tax effects to OCI in total in the one-statement approach but to each individual item in the two-statement approach, thereby enhancing usefulness.
• D) The two-statement approach is significantly less costly to prepare.

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Definitions:

Promissory Note

A financial instrument containing a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

Net Credit Sales

The total value of sales made on credit minus any returns or allowances.

Allowance for Doubtful Accounts

A balance sheet account representing the estimated percentage of accounts receivable that may not be collected.

Net Credit Sales

The total value of credit sales minus returns and allowances over a specific period, indicating the true revenue generated from credit transactions.