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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Twanna

5 days ago

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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