91. Which of the following is/are true?
A. Comprehensive income equals the net amount of revenues, expenses, gains, and losses during an accounting period.
B. Authoritative guidance classifies revenues and expenses arising from a firm’s core business as components of net income.
C. Net income includes gains and losses from sales or exchanges of assets or settlements of liabilities related incidentally or peripherally to the firm’s core business.
D. Authoritative guidance classifies gains and losses from the remeasurement of certain assets and liabilities as either net income or other comprehensive income.
E. All of the above answer choices are true.
92. Accumulated Other Comprehensive Income
A. is a shareholders’ equity account that acts for other comprehensive income the way retained earnings acts for net income.
B. equals net income plus other comprehensive income.
C. includes gains and losses from sales or exchanges of assets or settlements of liabilities related incidentally or peripherally to the firm’s core business.
D. Firms close amounts in net income for a period to Accumulated Other Comprehensive Income at the end of the period.
E. All of the above answer choices are correct.
93. Which of the following is/are not
a component of comprehensive income?
A. Asset revaluation reserve
B. Net income
C. Foreign currency translation adjustment
D. Minimum pension liability adjustment
E. All of these are components of comprehensive income.
94. Assume that a firm uses the accrual basis of accounting. Indicate the amount of expense the firm recognizes during the month of November for each independent transaction.
a.Rent of $3,600 is paid on November 1 for the months November through January.
b.Inventory costing $2,500 is ordered on account. The invoice is received on November 25 and the goods are received on December 5.
c.Insurance premium of $900 is paid for a full year of coverage starting November 1.
d.On December 3, an invoice for November utilities of $325 is received.
e.On November 1, supplies costing $2,200 are purchased. At November 30, $500 of supplies remained on hand.
95. Certain merchandise that a firm may acquire may be inventory or supplies. Accounting treats them differently as to the matching criteria used.
Required:
a.Describe the situation where merchandise would be considered inventory. How would the firm account for the costs of the merchandise?
b.Describe the situation where merchandise would be considered supplies. How would the firm account for the costs of the merchandise?