Roland John G.

Redilla
SYNTHESIS 2

Statement of Profit or Loss and Other Comprehensive Income

The transactions of a business for the accounting period are first recorded
in the books of original entry, then posted therefrom into the general ledger.
Those amounts in the ledger will then be tested for their accuracy with the help of
the trial balance. After the preparation of trial balance, the entity will have to
determine the profit earned or loss incurred and its financial standing.
Profit or loss is used as measure of the performance or as the basis for
other measures, such as return on investment or earnings per share. The
elements directly related to the measurement of profit are income and expenses.
Income is the increase in economic benefits during the accounting period in
the form of inflows or enhancements of assets or decreases of liabilities that
result in increases in the equity, other than those relating to contributions from
equity participants.
Expenses, on the other hand, are decreases in economic benefits during
the accounting period in the form of outflows or depletion’s of assets on
incurrences of liabilities that result in decreases in equity, other than those
relating to distributions to equity participants.
For the purpose of determining the financial performance of the company,
the entity will have to prepare the Statement of Profit or Loss and Other
Comprehensive Income.
The statement of profit or loss and other comprehensive income or simply
the Statement of Comprehensive Income shall present, in addition to the profit or
loss and other comprehensive income sections:
a) profit or loss;
b) total other comprehensive income;
c) comprehensive income for the period, being the total of profit or loss and
other comprehensive income.
Statement of Profit or Loss
The following are the information to be presented in the profit or loss section
or the statement of profit or loss
a) revenue;
b) gains and losses arising from the derecognition of financial assets
measured at amortised cost;
c) finance costs;
 d) share of the profit or loss of associates and joint ventures accounted for
using the equity method;
e) if a financial asset is reclassified so that it is measured at fair value, any
gains or losses arising from a difference between the previous carrying
amount and its fair value at the reclassification date;
f) tax expense;
g) a single amount for the total of discontinued operations;

Forms of Income Statement

An entity shall present an analysis of expenses recognised in profit or loss
using a classification based on either their nature or their function within the entity,
whichever provides the informations that is reliable and more relevant for the
users.
1. Nature of Expense Method
Under this method, an entity aggregates the total expenses within the the
profit or loss according to their nature and does not reallocate them among
functions within the entity. This method may be simple to apply since theirs is no
allocations of expenses to functional classifications necessary.
Example of Nature of Expense Method:
Net Sales X
Other income X
Total Revenues X
Increase in inventory (X)
Net purchases X
Employee Benefits Costs X
Permits and Licenses X
Interest Expense X
Total Expenses (X)
Earnings before Tax X
Income Tax Expense (X)
Net Income X

2. Function of Expense Method

Also known as ‘Cost of Sales’ Method. It classifies expenses according to
their functions as part of cost of sales or, for example, the cost of distribution or
administrative activities. At a minimum, an entity disclosed its cost of sales under
this method separately from other expenses. This method can provide more
relevant information to users than the classification of expenses by nature, but
allocation of costs to functions may require arbitrary allocations and involve
considerable judgment.
Example of Function of Expense Method:
Net Sales X
Cost of Sales (X)
Gross Profit X
Operating Expenses (X)
Operating Income X
Other Income X
Earnings before Interest and Taxes X
Interest Expense (X)
Earnings before tax X
Income Tax Expense (X)
Net Income X

Gross Sales – this figure represents the amount of revenue generated by a

business. The first line will typically include the revue from the business’s primary
core products or services, as some business will have unrelated revenue streams.
Sales Returns and Allowances – merchandise returned by a customer and the
allowances granted to a customer because the seller shipped improper or
defective merchandise.
Sales Discounts – the reduction in the price of a product or service that is offered
by the seller in exchange for early payment by the buyer.
Net Sales - Sales revenue is recorded when a product is shipped, or more
precisely, when ownership of the product or service is transferred from the seller
to the buyer. In computing net sales, the discounts, returns and allowances are
deducted from the gross sales of the company.
Cost of Sales - also known as Cost of Goods Sold. These costs are direct costs
whenever a product is manufactured or sold by an entity.
Beginning Inventory X
Purchases X
Less: Purchase returns and allowances X
Purchase discounts X X
Net Purchases X
Add: Freight In X
Cost of Goods Purchased X
Cost of Goods Available for Sale X
Ending Inventory (X)
Cost of Sales X
Gross Profit – the amount determined by subtracting the cost of goods sold from
net sales
Operating Expenses - Operating Expenses are expenses other than cost of
goods sold that a company incurs in the normal course of business. These
include items such as management salaries, advertising expenditures, repairs,
maintenance costs, research and development and lease payments.
The Operating Expense is subdivided into two: Selling Expense and
Administrative Expense. The selling expense includes costs to earn sales. The
Administrative Expenses refers to the overhead of the company. These are costs
incurred that are necessary to maintain a company’s daily operations and
administer its business but not directly attributable to the production of goods and
services.
Other Income - Other income arises from different sources that does not come
from a company’s main business. Examples of other income could be income
from interest, rent, gains resulting from sale of property, plant and equipment.
Interest expense - interest expense is the cost to the firm of borrowing money. It
depends on the overall level of firm indebtedness and the interest rate associated
with the debt.
Taxes - Income taxes are necessary part of business for all profitable for-profit
firms. The tax of the company for the period can be calculated using published
tax tables from the respective government agencies.
Net Income - Net Income is the bottom line of the profit or loss statement. It
represents the base profit earned by a firm in a given accounting period.
The choice between the methods depends on the historical and industry
factors and the nature of the entity. Both methods provide an indication of those
costs that might vary, directly or indirectly, with the level of sales or production of
the entity. Because each method of presentation has merit for different types of
entities, the standard (Philippine Accounting Standard 1 Presentation of Financial
Statements) requires the management of an entity to select the presentation that
is more relevant and reliable. In using the function of expense method, additional
disclosures are required.

Other Comprehensive Income

The following are the components of other comprehensive income:
a) changes in revaluation surplus;
b) remeasurements of defined benefit plans;
c) gains and losses arising from translating the financial statements of a
foreign corporation;
 d) gains and losses from investments in equity instruments measured at fair
value through other comprehensive income;
e) the effective portion of gains and losses on hedging instruments in a cash
flow hedge;
f) for particular liabilities designated as at fair value through profit or loss, the
amount of the change in fair value that is attributable to change in the
liability’s credit risk.

Items a, b, d and f are other comprehensive income that will not be

reclassified subsequently to Profit or Loss. Items c and e are reclassification
adjustments that are reclassified to profit or loss in the current period that were
recognised in other comprehensive income in the current or previous periods.
Both of these are carried to reserves or shown separately in the statement of
changes in equity.
Example Statement of Comprehensive Income:
Net Income X
Other Comprehensive income
Foreign Currency Translation Gain X
Unrealised loss on derivative
contracts designed as cash flow
hedge X X
Comprehensive Income X

The total of all components of profit or loss and other comprehensive

income is the total comprehensive income. It is the change in equity during a
period resulting from transactions and other events, other than those changes
resulting from transactions with owners in their capacity as owners. The amount
that is transferred to the inappropriate retained earnings is only the net income.
A firm’s statement of comprehensive income indicates a great deal about
the health of an entity. Analysis of this statement provides the users of financial
statements with important insights into the future insights into the future potential
of the company.

Merchandising Corporation and Service Corporation Income Statements

A merchandising company purchases inventory and sells it at a markup.

The income statement of a merchandiser begins with gross profit, which is the
difference between sales revenues and cost of goods sold. The usual items
would be the shipping expenses, insurance for the products, storages costs and
any other costs relating to handling and maintenance of merchandise.
Example of Merchandising Corporation Income Statement:
Merchandising Company
Income Statement
For the Year Ended December 31
Sales X
Less: Cost of Sales X
Gross Profit X
Less: Operating Expenses
Selling Expense
Sales Salaries Expense X
Advertising Expense X
Utilities Expense - Store X
Store Supplies Expense X X
Administrative Expense
Office Salaries Expense X
Utilities Expense - Office X
Depreciation Expense - Office X
Permits and Licenses X
Office Supplies Expense X X
Total Operating Expense X
Operating Income X
Other Revenues and Expenses
Gain on Sale of Equipment X
Loss on Sale of property (X) X
Income before interest and taxes X
Less: Interest Expense X
Income before Tax X
Less: Income Tax Expense X
Net Income X

A service corporation performs tasks for you and charges accordingly. It is

usually at fixed amount or on a time and materials basis. The income statement
of a service company does not have cost of goods sold since there are no items
sold only service rendered. Instead the revenues from the services is followed by
the costs of doing the business or the cost of services. The usual items would be
the marketing costs and utilities expense.
Example of Service Business Income Statement
Service Company
Income Statement
For the Year Ended December 31
Service Revenue X
Less: Expenses
Salaries Expense X
Rent Expense X
Advertising Expense X
Utilities Expense X
Depreciation Expense X
Supplies Expense X X
Income before Tax X
Less: Income Tax Expense X
Net Income X
Review Questions
1. What is the use of profit or loss?
2. What is presented on the statement of profit or loss and other comprehensive
income?
3. What is an income?
4. What is an expense?
5. What is the nature of expense method of presenting profit or loss?
6. What is the function of expense of presenting profit or loss?
7. What are presented in the profit or loss?
8. What are the components of other comprehensive income?
9. What is the total comprehensive income?
10. What are the usual items in Service corporation’s Income Statement? In
Merchandising corporation’s?

Multiple Choice Questions

1. Which of the following method of presenting profit or loss recognises gross

profit?

a. Nature of Expense Method

b. Function of Expense Method

c. Other Comprehensive Income

d. None of these

2. The following is deducted to the Gross Sales to arrive at Net Sales except

a. Sales Returns

b. Sales Allowances

c. Sales Discounts

d. Freight In

3. It is the increase in economic benefits during the accounting period in the form
of inflows or enhancements of assets or decreases of liabilities that result in
increases in the equity, other than those relating to contributions from equity
participants.

a. Income

b. Expense

c. Losses

d. Drawings

4. It is the cost of the firm for borrowing money.

a. Tax expense

b. Administrative Expense

c. Interest Expense

d. Operating Expense

5. Which of the following is included in the profit or loss section of the income
statement?

a. changes in revaluation surplus;

b. remeasurements of defined benefit plans;
c. gains and losses arising from translating the financial statements of a foreign

corporation

d. tax expense

6. X company provided the following information for the calendar year::

Beginning Inventory P 20,000

Purchases 400,000
Freight In 5,000
Freight Out 12,000
Purchase Discounts 13,000
Ending Inventory 18,000
What is not included in computing for the cost of sales of X company?

a. Freight Out

b. Freight In

c. Purchase discounts
 d. Ending inventory

7. Which is not included in computing net sales?

a. Gross Sales

b. Sales Discounts

c. Freight Out

d. Sales Returns

8. Which of the following entities does not usually recognise cost of goods sold?

a. Merchandising

b. Retail

c. Manufacturing

d. Service

9. Which of the following is not included in the profit or loss statement?

a. changes in revaluation surplus

b. tax expense

c. finance cost

d. a single amount for the total discontinued operations

10. Gross Profit is computed by:

a. Net Sales less Cost of Goods Available for Sale

b. Gross Sales less Cost of Goods Sold

c. Net Sales less Cost of Sales

d. Net Sales less Purchases

Identification

________________1. It is the increase in economic benefits during the

accounting period in the form of inflows or enhancements of assets or decreases
of liabilities that result in increases in the equity, other than those relating to
contributions from equity participants.
________________2. It is the decrease in economic benefits during the
accounting period in the form of outflows or depletion’s of assets on incurrences
of liabilities that result in decreases in equity, other than those relating to
distributions to equity participants.
________________3. It is the bottom line of the profit or loss statement. It
represents the base profit earned by a firm in a given accounting period

________________4. It classifies expenses according to their functions as part

of cost of sales or, for example, the cost of distribution or administrative activities.

________________5. Entity that performs tasks for you and charges accordingly.
It is usually at fixed amount or on a time and materials basis.

________________6. Entity that purchases inventory and sells it at a markup.

________________7. Income that arises from different sources that does not
come from a company’s main business.

________________8. Under this method, an entity aggregates the total

expenses within the the profit or loss according to their nature and does not
reallocate them among functions within the entity.

________________9. The total of all components of profit or loss and of other

comprehensive income.

________________10. It is the cost to the firm of borrowing money. It depends

on the overall level of firm indebtedness and the interest rate associated with the
debt.
True or False

_______1. There is no gross profit when using the nature of expense method.

_______2. A service company does not usually recognise cost of sales

_______3. Interest expense is the expense arising from the normal course of
business.

_______4. Sales is debited when you sell a product.

_______5. Expense’s normal balance is credit.

_______6.Merchandising and Manufacturing corporations both recognise Cost of

Sales.
_______7. Nature of Expense method classifies expenses according to their
functions.

_______8. The total of profit or loss and other comprehensive income is the net
income.

_______9. Administrative expenses are expenses incurred necessary to sell the

products.

_______10. The entity can choose the method of presenting their profit or loss.

Problems

1. Gankoo Company provides the following information in the year ended

December 31, 20X8:

Purchases P 525,000
Purchase returns and allowances 15,000
Selling Expense 95,000
Merchandise Inventory, January 1 100,000
Merchandise Inventory, December 31 150,000
Sales 785,000
Sales returns and allowances 14,000
Sales Discounts 10,000
Administrative expenses 80,000
Freight In 50,000
Income Tax 25,000
Purchase discounts 10,000
Interest Expense 10,000

Required:

a. Prepare the income statement for the year using the nature of expense
method.

b. Prepare the income statement for the year using the function of expense
method.

2. Alpha Company provided the following information for the year ended
December 31, 20X5:

Gross Sales P 9,300,000

Sales returns and allowances 100,000
Sales discounts 200,000
 January 1 Inventory 1,750,000
December 31 Inventory 2,000,000
Purchases 6,000,000
Purchase returns 130,000
Purchase discounts 250,000
Interest revenue 190,000
Dividends revenue 100,000
Rent revenue 120,000
Gain from sale of PPE 400,000
Distribution Costs 1,420,000
Administrative expenses 1,200,000
Other expenses 300,000
Interest expense on Bonds Payable 300,000
Interest expense of Notes Payable 150,000

Determine the following:

a. Net Sales

b. Cost of Sales

c. Other income

d. Total Expenses

e. Income before Tax

3. Presented below is certain information pertaining to Duft Company

Assets, January 1 P 7,000,000

Assets, December 31 7,350,000
Liabilities, January 1 3,250,000
Common Stock, December 31 3,900,000
Retained earnings, December 31 450,000
Common stocks sold during the year 205,000
Dividends paid 95,000
Selling Expense 250,000
Administrative Expense 420,000
Income Tax Expense 30% of income before tax
Gross Profit 40% of Net Sales

Determine the following:

a. Increase in equity during the year

 b. Liability on December 31
c. Net income
d. Net income before Tax
e. Gross Profit
f. Cost of Sales
g. Net sales

4. Valkyrie Company had a net income of 920,000 and provided the following
data for the calendar year ended December 31, 2019:

Dividends Paid P 100,000

Retained Earnings 200,000
Gain on Sale of Equipment 1,750,000
December 31 Inventory 2,000,000
Foreign Currency Translation Gain 130,000
Unrealised gain on hedging
instrument using cash flow hedge 250,000

Requirements:

a. compute the comprehensive income.

b. what amount of income will be included in retained earnings appropriated?
c. What amount of income is carried to reserves or shown separately in the
statement of equity?

5. The following are the expenses of Beelze Company for the calendar year
December 31, 2016:

Accounting and Legal Fees P 280,000

Advertising 230,000
Freight Out 30,000
Interest 15,000
Loss on Sale of Equipment 72,500
Salaries of Officers 540,000
Rent (30% for Sales Division) 230,000
Sales salaries and commissions 430,000

Determine the following:

a. Selling Expense
 b. Administrative Expense

Ethical Issues:

1. Corbin Company wants to decrease the amount of tax. It believes that the
amount being paid should be used for other business activities. The
accountant was pressured to overstatement the expenses and understate
the income during the year. What should the accountant do?
2. Nico, an accountant of Dug Company, also holds a financial interest from
the employing organisation. In addition, he participated in incentive
compensation arrangements offered by the company. Eri, another
accountant, believes that unethical behaviour or actions will occur with the
employing organisation. She noticed that the company had overstated the
expenses and understated their income to reduce tax. What should she
do?
3. Mr. Dre, the accountant of Rex Company, was fired for poor performance.
Because of his spite, he decided to go the competitor of Rex Company
and traded valuable informations regarding their operations and got a
position. Was Mr. Dre unethical? Why or why not?
4. Winny markets and promotes herself as a professional accountant and
makes exaggerated claims for the services she offers and the
qualifications she possess. At a bar, she had a fight with a nurse, Ms.
Sana. and ridiculed her profession. What fundamental principle did Winny
violate? How so?
5. Aria Company operates in a calendar year. Before the preparation of the
financial statements, those charged with governance decided to reduce
the amount of employees if the still incur a loss this year. About 20% of the
workforce will be retrenched if it happens. The accountant can remove
these provisions in the financial statements and include the amount of
income the company generated during the month of January next year.
Should he do so? Why or why not?
Answer Key:

Review Questions:

1. Profit or loss is used as measure of the performance or as the basis for

other measures, such as return on investment or earnings per share.
The elements directly related to the measurement of profit are income
and expenses.
2. The statement of profit or loss and other comprehensive income or
simply the Statement of Comprehensive Income shall present, in
addition to the profit or loss and other comprehensive income sections:
a.) profit or loss;
b.) total other comprehensive income;
c.) comprehensive income for the period, being the total of profit or
loss and other comprehensive income.
3. Income is the increase in economic benefits during the accounting
period in the form of inflows or enhancements of assets or decreases of
liabilities that result in increases in the equity, other than those relating
to contributions from equity participants.
4. Expenses are decreases in economic benefits during the accounting
period in the form of outflows or depletion’s of assets on incurrences of
liabilities that result in decreases in equity, other than those relating to
distributions to equity participants.
5. Under nature of expense method, an entity aggregates the total
expenses within the the profit or loss according to their nature and does
not reallocate them among functions within the entity. This method may
be simple to apply since theirs is no allocations of expenses to functional
classifications necessary.
6. Function of expense method classifies expenses according to their
functions as part of cost of sales or, for example, the cost of distribution
or administrative activities. At a minimum, an entity disclosed its cost of
sales under this method separately from other expenses. This method
can provide more relevant information to users than the classification of
expenses by nature, but allocation of costs to functions may require
arbitrary allocations and involve considerable judgment.
7. The following are the information to be presented in the profit or loss
section or the statement of profit or loss
a.) revenue;
b.) gains and losses arising from the derecognition of financial assets
measured at amortised cost;
c.) finance costs;
d.) share of the profit or loss of associates and joint ventures accounted
for using the equity method;
 e.) if a financial asset is reclassified so that it is measured at fair value,
any gains or losses arising from a difference between the previous
carrying amount and it’s fair value at the reclassification date;
f.) tax expense;
g.) a single amount for the total of discontinued operations;
8. The following are the components of other comprehensive income:
a.) changes in revaluation surplus;
b.) remeasurements of defined benefit plans;
c.) gains and losses arising from translating the financial statements of a
foreign corporation;
d.) gains and losses from investments in equity instruments measured at
fair value through other comprehensive income;
e.) the effective portion of gains and losses on hedging instruments in a
cash flow hedge;
f.) for particular liabilities designated as at fair value through profit or loss,
the amount of the change in fair value that is attributable to change in
the liability’s credit risk.
9. The total of all components of profit or loss and other comprehensive
income is the total comprehensive income. It is the change in equity
during a period resulting from transactions and other events, other than
those changes resulting from transactions with owners in their capacity
as owners.
10. The usual items in a merchandising company would be the cost of sales,
shipping expenses, insurance for the products, storages costs and any
other costs relating to handling and maintenance of merchandise. In a
service company, The usual items would be the shipping expenses,
insurance for the products, storages costs and any other costs relating
to handling and maintenance of merchandise.

Multiple Choice Questions

1. B
2. D
3. A
4. C
5. D
6. A
7. C
8. D
9. A
10. C

Identification

1. Income
 2. Expense
3. Net income
4. Function of expense method
5. Service company
6. Merchandising company
7. Other income
8. Nature of expense method
9. Comprehensive income
10. Interest expense

True or False

1. True
2. True
3. False
4. False
5. False
6. True
7. False
8. False
9. False
10. True

Problems

1.
a.

Gankoo Company
Income Statement
Year Ended December 31, 20X8
Gross Sales P 785,000
Sales Returns and 14,000
Allowances
Sales Discount 10,000
Net Sales 761,000
Merchandise
Inventory, Jan. 1 P 100,000
Purchases P 525,000
Freight In 50,000
Cost of Goods 575,000
Purchased
Purchase Returns (15,000)
 and Allowances
Purchase Discounts (10,000)
Net Purchases 550,000
Cost of Goods 650,000
Available for Sale
Merchandise
Inventory, Dec. 31 150,000
Cost of Goods Sold (500,000)
Gross Income 261,000
Selling Expense 95,000
Administrative 80,000 (175,000)
Expense
Income before 86,000
Interest and Taxes
Finance Cost (10,000)
Income before Taxes 76,000
Income Tax Expense (25,000)
Net Income 51,000
b.

Gankoo Company
Income Statement
Year Ended December 31, 20X8
Net Sales P 761,000
Increase in inventory P(50,000)

Net purchases 550,000

Selling Expense 95,000
Administrative expense 80,000
Finance Cost 10,000
Total Expenses (685,000)
Income before Tax 76,000
Income Tax Expense (25,000)
Net Income 51,000

2.
a. P9,000,000

Gross Sales P 9,300,000

Sales Returns and Allowances 100,000
Sales Discount 200,000
Net Sales P 9,000,000
b. P5,370,000
 Merchandise Inventory, January 1 P 1,750,000
Purchases P 6,000,000
Purchase Returns and Allowances (130,000)
Purchase Discounts (250,000)
Net Purchases 5,620,000
Cost of Goods Available for Sale 7,370,000
Merchandise Inventory, December 31 2,000,000
Cost of Goods Sold P 5,370,000

c. P 810,000

Interest Revenue P 190,000

Dividends Revenue 100,000
Rent Revenue 120,000
Gain on Sale of PPE 400,000
Other Income P 810,000

d. P3,370,000

Distribution Costs P 1,420,000

Administrative Expenses 1,200,000
Other Expenses 300,000
Interest Expense on Bonds
300,000
Payable
Interest Expense on Notes
150,000
Payable
Total Expense P 3,370,000

e. P1,070,000

Net Sales P 9,000,000

Other Income 810,000
Cost of Sales (5,370,000)
Expenses (3,370,000)
Income before Tax 1,070,000

3.
a. 4,350,000 – 3,750,000 = P600,000 increase

Jan. 1 Dec. 31
Assets P 7,000,000 P 7,350,000
Liabilities 3,250,000
Equity P 3,750,000 P 4,350,000*
 *3,900,000+450,000

b. P7,350,000 – 4,350,000 = P3,000,000

c. P490,000

Change in Equity P 600,000

Dividends Paid 95,000
Common stocks
(205,000)
paid
Net Income 490,000

d. 490,000/(1-.3) = P700,000
e. 700,000 + 250,000 + 420,000 = P1,370,000
f. (1,370,000/.4)*(1-.6) = P2,055,000
g. P1,370,000/.4 = P3,425,000

4.
a. P800,000

Net Income P 920,000

Foreign Currency Translation Gain 130,000
Unrealised gain on hedging
instrument using cash flow hedge (250,000)
Comprehensive Income P 800,000
b. P920,000
c. P(120,00)

5.
a. 529,000

Advertising Expense P 230,000

Freight Out 30,000
Rent Expense(30% * 230,000) 69,000
Salaries and Commissions expense 430,000
Selling expense P 759,000

b. P981,000

Accounting and Legal Fees P 280,000

Rent Expense(70% * 230,000) 161,000
Salaries of Officers 540,000
 Administrative expense P 981,000

Ethical Issues

1. The accountant can try to obtain advice, when appropriate, from within the
employing organisation, an independent professional advisor or a
professional body. He could also use a formal dispute resolution process
with the employing organisation or seek legal advice.
2. In these circumstances the professional accountant may consider
obtaining legal advice. She could also try to eliminate or reduce the
familiarity threats and ask for tighter internal controls for the company.
3. Mr. Dre was unethical. He violated the Code of Ethics for professional
accountants as he released a confidential information. An accountant is
required to respect the confidentiality of information acquired as a result of
professional and business relationships and shall not disclose any such
information to third parties without property and specific authority.
4. Winny violated the principle of professional behaviour. Aside from making
exaggerated claims for her services they offer, she also made disparaging
references about the work of another person. An accountant should
comply with relevant laws and regulations and avoid any action that may
discredit the profession.
5. The accountant should report the financial statements that are free from
materially false or misleading statements without omitting and obscuring
information required by the standards to be included where such omission
or obscurity would be misleading.
References:

 Ballada, W. (2014). Basic Accounting Made Easy. Domdane Publisher.

 Kieso, D et. al. (2014). Intermediate Accounting. 15th ed. John Wiley &
Sons, Inc.
 Tracy, J. (2016). Accounting for Dummies. 6th ed. For dummies Publishing
Company
 Valix, C. et al. (2016). Financial Accounting Volume Three. GIC Enterprise
and Co., Inc.
 Whittington, R. (2014). CPAexcel Exam Review Study Guide July 2014
Financial Accounting and Reporting. John Wiley and Sons, Inc.