Asked by Sanghishetty Swathi on May 14, 2024
Verified
Which of the following statements regarding earnings per share is false?
A) It is reported on the income statement.
B) It increases when net income increases.
C) It is calculated using the average number of common shares outstanding during the period.
D) It would not be affected by additional shares of common stock issued during the year.
Average Number
A mathematical concept that represents the central or typical value in a set of numbers, calculated by dividing the sum of all values by the count of numbers.
- Comprehend the relevance and process of calculating earnings per share (EPS).
Verified Answer
MP
Marissa ParusMay 18, 2024
Final Answer :
D
Explanation :
Additional shares of common stock issued during the year would increase the number of common shares outstanding, which would decrease earnings per share (EPS). Therefore, EPS would be affected by additional shares of common stock issued during the year, making statement D false.
Learning Objectives
- Comprehend the relevance and process of calculating earnings per share (EPS).
Related questions
What Additional Information Is Required to Be Presented on the ...
Describe Earnings Per Share,including How It's Computed and How Earnings ...
Earnings Per Share Is Calculated by Dividing Net Income by ...
Basic Earnings Per Share Is Calculated by Dividing ...
Selected Data from Carmen Company at Year-End Are Presented Below ...