Which Of The Following Is A Component Of Other Comprehensive Income?

(Correct Answer Below)

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Which Of The Following Is A Component Of Other Comprehensive Income?

A) Changes in market value of inventory. B) Unrealized gain or loss on trading securities. C) Cumulative currency-translation adjustments. D) Minimum accrual of vacation pay.
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C) Cumulative currency-translation adjustments. Answer C is correct. Foreign currency translation adjustments for a foreign operation that is relatively self-contained and integrated within its environment do not affect cash flows of the reporting entity. They should be excluded from earnings. Accordingly, translation adjustments are reported in other comprehensive income (OCI).

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