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:

Foramen Magnum

A large opening at the base of the skull through which the brain connects to the spinal cord.

Medulla Oblongata

The lower portion of the brainstem controlling vital functions such as heartbeat and breathing.

Spinal Cord

The cylindrical bundle of nerve fibers and associated tissue that is connected to the brain and lies within the vertebral canal.

Thecal Sac

The protective membrane surrounding the spinal cord and nerve roots.