Question

[4] What is the purpose of reporting comprehensive income? A. To summarize all changes in equity from nonowner sources. B. To reconcile the difference between net income and cash flows provided from operating activities. C. To provide a consolidation of the income of the firm’s segments. D. To provide information for each segment of the business.

Answer 1

A. To summarize all changes in equity from non-owner sources.

Step-by-step explanation:

Comprehensive income does not include the transactions like normal sale or purchase of inventory.

Comprehensive income includes all the income which is part of income of company, but is received or earned from sources which is not controlled by the owners, or in no matter are related to owners.

It is presented just below the income statement.

Therefore, correct option is

A. To summarize all changes in equity from non-owner sources.