Which statement is correct about the statement of comprehensive income?
A)Entities using the nature format for expenses must provide additional disclosure.
B)The single-step format provides more information than the multiple-step format.
C)The multiple-step format must be used in financial reporting.
D)Entities using the function format for expenses must provide additional disclosure.

Question

Quizplus · Accepted Answer

Entities using the function format for expenses in their statement of comprehensive income are required to provide additional disclosure about the nature of expenses. This is because the function format categorizes expenses according to their function (e.g., cost of sales, selling expenses) rather than their nature (e.g., salaries, depreciation), and additional information on the nature of expenses may be necessary for users of financial statements to understand the costs associated with different functions.

Which Statement Is Correct About the Statement of Comprehensive Income