If the Conversion of Potential Ordinary Shares to Ordinary Shares

question 35

True/False

If the conversion of potential ordinary shares to ordinary shares is mandatory they must be included in diluted earnings per share even if their inclusion does not dilute earnings per share.

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Definitions:

Common Shares

Equity securities that represent ownership in a corporation, granting voting rights and a share in the company's profits through dividends.

Equity Method

An accounting technique used for recording investments in which the investor has significant influence over the investee, but not full control.

Straight Line Amortization

A method of allocation of an asset's cost over its useful life in equal annual amounts.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.