AICPA Exam CPA-Financial Topic 3 Question 106 Discussion

Actual exam question for AICPA's CPA-Financial exam

Question #: 106
Topic #: 3

Which of the following describes how comprehensive income should be reported?

AMust be reported in a separate statement, as part of a complete set of financial statements.

BShould not be reported in the financial statements but should only be disclosed in the footnotes.

CMay be reported in a separate statement, in a combined statement of income and comprehensive income, or within a statement of stockholders' equity.

DMay be reported in a combined statement of income and comprehensive income or disclosed within a statement of stockholders' equity; separate statements of comprehensive income are not permitted.

Show Suggested Answer

Suggested Answer: C

Choice 'c' is correct. Expensing insurance premiums when paid (rather than allocating them to the periods benefited) is a correction of an error in previously presented financial statements.

by Scarlet at Jan 25, 2025, 08:35 AM

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Una

1 months ago

Option A is the classic 'separate statement' approach, but options C and D give more flexibility. I'd go with C since it covers the most ground.

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Rikki

2 days ago

I think option D could also work, as long as it's disclosed within a statement of stockholders' equity.

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Lino

14 days ago

I agree, option C seems like the most flexible choice.

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Quinn

1 months ago

Haha, imagine if they said comprehensive income shouldn't be reported at all - that would be like a black hole in the financial statements! Good thing option B isn't the right answer.

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Leota

3 days ago

Haha, yeah, that would be chaotic! Good thing there are clear guidelines for reporting comprehensive income.

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Gilbert

9 days ago

C) May be reported in a separate statement, in a combined statement of income and comprehensive income, or within a statement of stockholders' equity.

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An

12 days ago

A) Must be reported in a separate statement, as part of a complete set of financial statements.

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Desiree

2 months ago

I'm leaning towards option D. Separate statements of comprehensive income don't seem to be allowed, so the combined statement or disclosure within the equity statement are the way to go.

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Velda

4 days ago

I'm not sure, but I think option A might be too restrictive since it requires a separate statement for comprehensive income.

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Lashawnda

5 days ago

I think option C could also work, as it allows for reporting in a separate statement or within the statement of stockholders' equity.

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Lajuana

9 days ago

I agree, option D seems to be the most appropriate way to report comprehensive income.

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Option C sounds like the most comprehensive approach. Reporting comprehensive income in a separate statement, a combined statement, or within the statement of stockholders' equity seems to cover all the bases.

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Tyra

25 days ago

Having the option to report comprehensive income in different statements gives stakeholders a more complete view of the company's financial health.

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Hershel

1 months ago

It's important to have flexibility in how comprehensive income is reported to ensure transparency.

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Lera

1 months ago

I think reporting comprehensive income in multiple ways provides a clearer picture of the company's financial performance.

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Eloisa

1 months ago

I agree, option C does seem like the most comprehensive approach.

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Rodrigo

2 months ago

I disagree, I believe comprehensive income can be reported in a combined statement of income and comprehensive income.

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Paulina

2 months ago

I agree with Fatima, it makes sense to have it as part of a complete set of financial statements.

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Fatima

3 months ago

I think comprehensive income should be reported in a separate statement.

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AICPA Exam CPA-Financial Topic 3 Question 106 Discussion

Contribute your Thoughts:

Una

Rikki

Lino

Quinn

Leota

Gilbert

An

Desiree

Velda

Lashawnda

Lajuana

Twanna

Tyra

Hershel

Lera

Eloisa

Rodrigo

Paulina

Fatima