Final answer:
Accumulated Other Comprehensive Income (AOCI) is an equity account that captures gains and losses not recognized in the income statement but included in the balance sheet. It includes items like currency translations and unrealized gains/losses on marketable securities.
Step-by-step explanation:
The account of Accumulated Other Comprehensive Income (AOCI) is a type of equity account that includes gains and losses that are not recognized in the income statement, but are directly included in the Stockholders' Equity section of a company's balance sheet. AOCI captures items like foreign currency translation adjustments, unrealized gains or losses on available-for-sale marketable securities, and changes in the fair value of certain derivative financial instruments.
For example, if a company owns stocks that have not been sold yet, any changes in their market value are recorded in AOCI. If the company decides to sell the stocks, the accumulated gains or losses in AOCI are then transferred to the income statement.