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:

Bromides

Commonplace remarks or clichés that lack originality or interest.

Platitudes

Overused statements or cliches that often lack originality or significance.

Pareto Efficient Allocation

A situation in economic theory where resources are allocated in such a way that it is impossible to make any one individual better off without making at least one individual worse off.

Pareto Optimal Allocation

A resource distribution scenario where no individual can be made better off without making at least one individual worse off.