Canadian Securities Course (CSC) Level 1 Practice Exam

What is the purpose of the statement of comprehensive income?

1. Reflects a company's total assets and liabilities.

2. Shows a company's market share performance.

3. Compares a company's revenue and expenses.

4. Displays the earned income against the total spent.

The correct answer is: Displays the earned income against the total spent.

The purpose of the statement of comprehensive income is to display the earned income against the total spent by a company. It provides a summary of all revenues and expenses incurred by the business during a specific period, allowing investors and analysts to evaluate the company's financial performance. Option A is incorrect because reflecting a company's total assets and liabilities is the role of the balance sheet, not the statement of comprehensive income. Option B is incorrect as the market share performance of a company is typically assessed through market share data, not the statement of comprehensive income. Option C is incorrect as comparing a company's revenue and expenses falls within the realm of the income statement, not the statement of comprehensive income.