Which of the Following Is True of Comprehensive Income

question 7

Multiple Choice

Which of the following is true of comprehensive income?

• A)All items included in comprehensive income enter into the determination of net income.
• B)Dividend payments are not included in the determination of comprehensive income,even though it results in a decrease in total stockholders' equity.
• C)Comprehensive income includes company changes in total stockholders' equity from all sources,including owners' investments.
• D)Comprehensive income cannot be combined with a traditional income statement into a combined statement of comprehensive income.

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Definitions:

Compounded Monthly

Describes interest on an investment or loan that is calculated and added to the principal balance monthly, allowing for the interest to earn interest.

Guaranteed Investment Certificate

A secure investment that guarantees to return the principal amount along with a fixed rate of interest at the end of the investment term.

Interest

The cost of borrowing money, calculated as a percentage of the total amount borrowed.

Compounded Annually

Refers to the process of earning interest on both the initial principal and the accumulated interest from previous periods on a deposit or loan.