The May 1998 issue of the Journal of Accountancy includes an article by Randall W. Luecke and David T. Meeting entitled “How Companies Report Income.”

Instructions Read the article and answer the following questions:

(a) What two major income reporting concepts have been used by business accountants at different times over the years? Define and differentiate these two income reporting concepts.

(b) The article states, “The pendulum of income reporting is again changing direction.”

Which way is the pendulum swinging?

(c) What recent pronouncement pushed income reporting in the new direction?

(d) What items are included in Other Comprehensive Income? _

(e) What are three ways companies have to display comprehensive income?

INTERPRETING FINANCIAL STATEMENTS __