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Business Adminstration
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  Running head: BUSINESS ACCOUNTING ASSIGNMENT 0 | Page  ANSWER TO SUB-QUESTION [A] The statement of comprehensie income is defined as the change   the change ine!uit of a #usiness enterprise during a period from transactions and other eents andcircumstances from non$o%ner sources& It inc'udes a'' changes in e!uit during aperiod e(cept those resu'ting from inestments # o%ners and distri#utions to o%ners)*as#&org+ ,-./0&The genera' purpose of the statement he'ps financia' statement users ea'uate thepast financia' performance of a compan and proides them a #asis for predictingfuture performances& *inancia' statement users need this information to assesspotentia' changes in the entities economic resources and its a#i'it to generate cashfrom those resources& *inancia' statement users can a'so use this information toea'uate ho% an additiona' resources might #e effectie' used& This statementre!uires a'' income statement items to #e reported either as a regu'ar item in theincome statement or a specia' item as other comprehensie income )*as#&org+ ,-./0&  1 | Page  Income statement+ a'so 1no%n as 2rofit and 3oss Account+ indicates ho% thereenues )mone receied from the sa'e of products and serices #efore e(penses areta1en out+ a'so 1no%n as the 4top 'ine40 are transformed into the net income )the resu'tafter a'' reenues and e(penses hae #een accounted for+ a'so 1no%n as 4net profit4 or the 4#ottom 'ine40& It disp'a s the reenues recogni5ed for a specific period+ and thecost and e(penses charged against these reenues+ inc'uding %rite$offs and ta(es)6e'fert+ E& A&+ ,--,0&Other comprehensie income represents certain gains and 'osses of the compan that are not recogni5ed in the 2rofit and 3oss Account& Some items that comprise thisincome inc'ude unrea'i5ed gains and 'osses on aai'a#'e for sa'e securities+ gains and'osses on deriaties he'd as cash f'o% hedges+ gains and 'osses resu'ting fromtrans'ating the financia' statements of foreign su#sidiaries+ actuaria' gains and 'osseson defined #enefit p'ans recogni5ed and changes in the rea'uation surp'us&Under the Conceptua' *rame%or1 for *inancia' Reporting+ income is defined asincreases in economic #enefits during the accounting period in the form of inf'o%s or enhancements of assets or decreases of 'ia#i'ities that resu't in increases in e!uit +other than those re'ating to contri#utions from e!uit participants )Iasp'us&com+ ,-./0&Some e(amp'es of income are sa'es+ fees+ diidends and renta' fees& 2 | Page  Under the Conceptua' *rame%or1 for *inancia' Reporting+ e(penses is definedE(penses are decreases in economic #enefits during the accounting period in the formof outf'o%s or dep'etions of assets or incurrences of 'ia#i'ities that resu't in decreases ine!uit + other than those re'ating to distri#utions to e!uit participants )Iasp'us&com+,-./0 & Some e(amp'es of e(penses are %ages+ cost of sa'es and depreciation& 3 | Page
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