Indicate whether each of the following statements is true or false. If false, indicate how to...

Indicate whether each of the following statements is true or false. If false, indicate how to correct the statement.

a. The amount reported for accumulated other comprehensive income (AOCI) on the balance sheet must be a positive amount consistent with all other stockholders’ equity accounts.

b. Changes in AOCI are reflected in other comprehensive income, which is different from net income.

c. Other comprehensive income does not imply a change in cash.

Expert Solution

Ans:

a. False ,

Explanation : AOCI can be negative at some times. It need not be positive all the time. Treasury stock reported will be always a negative.

b. True ,

Explanation : Other comprehensive income includes increase and decrease in stockholders equity which is not shown in net income of income statement and shown in retained earnings.

c. True ,

Explanation : Other comprehensive income are recognized gains and losses. It doesn't result in cash inflows and outflows

ekkarill92 answered 2 years ago

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