Which of the Following Is True of Comprehensive Income

question 116

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)Payment of dividend is not included in the determination of comprehensive income, even though it results in a decrease in total stockholders' equity.
• C)Comprehensive income includes company's change 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 for reporting purposes.

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Definitions:

Deferred Tax Asset

Represents future tax relief for a company, arising from deductible temporary differences, carryforward losses, or credits.

Accrued Product Warranty Costs

Costs that have been incurred but not yet paid for product warranties, recognized as liabilities on the balance sheet.

Enacted Tax Rates

The legally approved rates of taxation set by governmental authorities.

Pre-Tax Book Income

Income of a business before the deduction of tax expenses as reported in the financial statements, not necessarily reflective of taxable income.