Which of the Following Is Correct About the Difference Between

question 89

Multiple Choice

Which of the following is correct about the difference between basic earnings per share (EPS) and diluted earnings per share?

• A)Basic EPS uses total common shares outstanding,whereas diluted EPS uses the weighted-average number of common shares.
• B)Basic EPS is not a required disclosure,whereas diluted EPS is required disclosure.
• C)Basic EPS is not adjusted for the potential dilutive effects of complex financial structures,whereas diluted EPS is adjusted.
• D)Basic EPS uses comprehensive income in its calculation,whereas diluted EPS does not.

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Definitions:

Holder in Due Course

A legal term referring to a party that has acquired a negotiable instrument in good faith and for value and thus has certain protections against defenses and claims that could be asserted against the transferor.

Personal Defenses

Legal arguments or claims that an individual can use personally to avoid enforcement of a contract or legal obligation against them.

Contractual Defenses

Legal arguments that can be used to challenge the enforceability of a contract.

Promissory Note

A financial document in which one party promises to pay another party a specific sum of money on a specified date or on demand.