Business Accounting

Topics: Generally Accepted Accounting Principles, Balance sheet, Income statement Pages: 3 (2125 words) Published: October 22, 2014
Statement of Comprehensive income is a financial report that changes in equity of a business enterprise during a period transaction and other events and circumstance from non-owner sources. It is different from typical income statement which reflects profits and losses and may omit changes in net assets (IFRS.org, 2009). The general purpose of the statement of comprehensive income is to provide information about the companys financial position, performance and cash flow that is useful for economic decision-making by a range of user such as owners who did no managing the business, potential owners, lenders and creditors. These users are not in the position to have a report tailor to their information needs. There are two ways in presenting the total comprehensive income for a period. It is either by in a single statement of comprehensive income or in two statements of comprehensive income. In a single statement of comprehensive income, it present all items of income and expense recognised in the period. While a two statement include an income statement which include all items of income and recognised in the period except those that are recognised in total comprehensive income outside of profit and loss as required and a statement of comprehensive income. Profit or loss also known as net income is used as a basis for the measurement of performance of the company. It can also be used to measure return on investment (ROI) or earnings per share. The conceptual framework states that income and expenses are the elements that are directly related to the measurement of profit. Income refers to the increase in economic benefit during the accounting period in the form of inflow or enhancement of assets or decrease of liabilities that result in increase in equity. There are two types of income. First, sales revenue refers to income earned in the course of business activity for example a coffee house selling coffees. Second, gain refers to income that does not arise from...

References: Accounting-simplified.com. (2014).Income Definition Explanation Examples Types Accruals. Retrieved 10 September 2014, from HYPERLINK http//accounting-simplified.com/income.html http//accounting-simplified.com/income.html IFRS.org,. (2009).Module 4 Statement of Financial Position. Retrieved 12 September 2014, from HYPERLINK http//www.ifrs.org/IFRS-for-SMEs/Documents/Module04_version2010_1_SOFP_Eng.pdf http//www.ifrs.org/IFRS-for-SMEs/Documents/Module04_version2010_1_SOFP_Eng.pdf IFRS.org,. (2009).Module 5 Statement of Comprehensive Income and Income Statement. Retrieved 12 September 2014, from HYPERLINK http//www.ifrs.org/IFRS-for-SMEs/Documents/IFRS20for20SMEs20Modules/Module05__version202013.pdf http//www.ifrs.org/IFRS-for-SMEs/Documents/IFRS20for20SMEs20Modules/Module05__version202013.pdf Iacprofessionals.com,. (2014).Costs of Goods Sold vs. Inventory Where Does it fit IAC Professionals. Retrieved 16 September 2014, from HYPERLINK http//www.iacprofessionals.com/blog/2011/05/costs-of-goods-sold-vs-inventory-where-does-it-fit/ http//www.iacprofessionals.com/blog/2011/05/costs-of-goods-sold-vs-inventory-where-does-it-fit/ Kolitz, D., Kolitz, D. (2009).Questions, exercises and problems in financial accounting (1st Ed.). Lansdowne South Africa Juta. Iacprofessionals.com,. (2014).Costs of Goods Sold vs. Inventory Where Does it fit IAC Professionals. Retrieved 16 September 2014, from HYPERLINK http//www.iacprofessionals.com/blog/2011/05/costs-of-goods-sold-vs-inventory-where-does-it-fit/ http//www.iacprofessionals.com/blog/2011/05/costs-of-goods-sold-vs-inventory-where-does-it-fit/ Business Accounting Assignment PAGE MERGEFORMAT 8 Page Y, dXiJ(x(
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