Chapter 3

Question 1

The Transaction approach focuses on:

Answer 1

Income-related activities

Question 2

One statement approach focuses on:

Answer 2

Comprehensive income

Question 3

Two statement approach focuses on:

Answer 3

2 separate, but consecutive statements of net income and other comprehensive income

Question 4

The Major elements of income statements

Answer 4

1. Revenues
2. Expenses
3. Gains
4. Losses

Question 5

Other Comprehensive Income is:

Answer 5

Gaines and losses that bypass the income statement (but still affect stockholders’ equity