MGMT 120A Chapter 4: Chapter 4
Document Summary
Chapter 4: the income statement, comprehensive income, and the stmt of cash flows. Ideally, resources should be allocated to private enterprises that will provide the goods and services our society desires and at the same time provide a fair rate of return to those who supply the resources. The purpose of the income stmt (sometimes called the stmt of operations or stmt of earnings) is to summarize the profit-generating activities that occurred during a particular reporting period. It is thought of as most useful for predicting future profitability (cash generating ability) A few types of gains and losses are excluded from the determination of net income and the inc stmt but are included in the broader concept of comprehensive income. We refer to these as items of other comprehensive income (oci) or loss. Oci can be reported in a single, continuous stmt of comprehensive income or in two separate but consecutive stmts.
