Which of the following items is included as part of comprehensive income but not as part of net income?

Question

Quizplus · Accepted Answer

Comprehensive income includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. It encompasses net income and other comprehensive income (OCI). Net income is derived from the company's earnings activities and includes items such as revenue, expenses, gains, and losses that are realized during the accounting period.
Unrealized holding gains or losses refer to the changes in the fair value of investments that are classified as available-for-sale or, in some accounting standards, as fair value through other comprehensive income. These gains or losses are not realized through actual sales and therefore are not included in net income until the investments are sold. Instead, they are reported as a separate component of other comprehensive income until they are realized.
The other options provided are typically included in the calculation of net income:
A. Income tax expense is a component of net income as it is an expense incurred during the period.
C. Gains or losses on the sale of equipment are included in net income as they are realized upon the sale of the equipment.
D. Gains or losses on the sale of investments are included in net income when they are realized upon the sale of the investments.
Therefore, the correct answer is B. Unrealized holding gains or losses, as they are included in comprehensive income but not in net income.

Which of the Following Items Is Included as Part of Comprehensive