You are inspecting the statement of comprehensive income of a company. It reports a profit of $75 800. From this information, you can conclude that:
A) the owners have a rather small investment in the firm.
B) the company is a merchandising firm.
C) there have been financing and investing activities during the period but no operating activities.
D) the value of resources received from sales exceeds the value of resources consumed.

Question

Quizplus · Accepted Answer

The fact that the statement of comprehensive income reports a profit of $75 800 indicates that the value of resources received from sales exceeds the value of resources consumed, which is a result of operating activities. This information does not provide any insight into the size of the owners' investment or the nature of the company (i.e. merchandising or otherwise) or whether there have been financing and investing activities during the period.

You Are Inspecting the Statement of Comprehensive Income of a Company