FASB's Concept of Comprehensive Income

question 80

Multiple Choice

FASB's concept of comprehensive income

• A) excludes transactions that involve the payment of dividends.
• B) requires that all transactions must be shown on the income statement.
• C) has a primary drawback because it allows management to manipulate the income figure to a certain extent.
• D) allows items that are not necessarily under management's control, such as natural disasters, to be shown as an adjustment of retained earnings.

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Definitions:

Mean

The arithmetic average of a set of numbers, calculated by adding all the numbers together and dividing by the count of those numbers.

Median

A statistical measure representing the middle value in a sorted, ascending or descending, list of numbers.

Mode

The value that appears most frequently in a given set of data, or a specific way or manner in which something occurs or is experienced.

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution without violating any constraints.