Asked by Deviu Bhandari on Jul 27, 2024
Verified
Which of the following transactions decreases earnings per share?
A) Collection of an account receivable.
B) Selling treasury stock for an amount less than its cost.
C) A decrease in the market value per share.
D) Paying cash in advance for rent.
Earnings Per Share
A financial metric that represents the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.
Treasury Stock
Shares that the issuing company initially distributed and then bought back, decreasing the total number of shares available for trade in the market.
- Perceive the implications of transactions on financial metrics.
Verified Answer
ZK
Zaeem KadiwalaJul 27, 2024
Final Answer :
B
Explanation :
Selling treasury stock for an amount less than its cost reduces the earnings per share calculation as it results in a loss. The other options do not directly impact earnings per share.
Learning Objectives
- Perceive the implications of transactions on financial metrics.
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