Which Statement Is Correct

question 47

Multiple Choice

Which statement is correct?

• A)Diluted EPS assumes that all dilutive securities are converted.
• B)Diluted EPS assumes that all anti-dilutive and dilutive securities are converted.
• C)Diluted EPS assumes that all ordinary securities are converted.
• D)Diluted EPS assumes that all ordinary and dilutive securities are converted.

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Definitions:

Cost Of Goods Sold

The expenses directly linked to the creation of products a company sells, including both materials and labor costs.

Period Costs

Expenses that are not directly tied to the production of goods or services and are instead expensed in the period they are incurred, such as selling, general, and administrative expenses.

Selling Expenses

Costs incurred directly related to the selling of products or services, including advertising, sales commissions, and store maintenance.

Administrative Expenses

Costs attributed to the general operation of a business, including salaries of executives, office supplies, and utilities, but not including production costs.