Certified Management Accountant Part 1 questions with correct answers

What does Comprehensive income include? Correct Answer-All changes in equity except those transactions executed by the owners of the company, such as owner's contribution and distribution. What are examples of other comprehensive income items? Correct Answer-1. Foreign currency translation gains and losses 2. Gains or losses and prior service costs or credits related to a defined benefit pension plan that have not been recognized as components of net periodic benefit cost 3. Unrealized holding gains or losses for available for sale securities 4. The effective portion of the gain or loss on a derivative designated as a cash flow hedge What are examples of owners' distributions not included in comprehensive income? Correct Answer-1. cash dividends when declared 2. re-acquisitions of equity securities 3. distributions "in kind" of non-cash assets What is the full disclosure principle? Correct Answer-States that an entity should include all information that will influence the understanding, judgment, and decisions of the users of financial statements. Companies must disclose their significant accounting policies, assumptions, and estimates in the footnotes to the financial statements. What are Accounting Policy Disclosures? Correct Answer-Involve any of the following: 1. A selection from existing acceptable a