The FASB's Concept of Comprehensive Income

question 107

Short Answer

The FASB's concept of comprehensive income
a.allows items that are not necessarily under management's control, such as currency translation adjustments, to be shown as an appropriation of retained earnings.
b.has a primary drawback because it allows management considerable flexibility in determining the net income figure.
c.excludes transactions that involve the payment of dividends and other transactions affecting owners.
d.requires that all transactions representing changes in asset and liability accounts must be shown on the income statement.

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Definitions:

Wage-Base Limitation

A ceiling on the amount of an employee's income that is subject to certain taxes or contributions.

Progressive

A political and social philosophy advocating for reform and improvements in social justice, welfare, and the protection of civil liberties.

Regressive

A term describing a tax system where the tax rate decreases as the taxable amount increases, disproportionately affecting those with lower incomes.

Payroll Tax

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff.