When Computing Earnings Per Share on Common Stock,dividends on Cumulative,nonconvertible

question 52

Multiple Choice

When computing earnings per share on common stock,dividends on cumulative,nonconvertible preferred stock should be

• A) deducted from net income only if the dividends were declared or paid in the current period.
• B) deducted from net income regardless of whether the dividends were not paid or declared in the period.
• C) deducted from net income only if net income is greater than the dividends.
• D) ignored.

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Definitions:

Factor

A component or element that contributes to a result or outcome.

Multiple Structures

The existence or creation of various organizational structures to support the diverse needs and strategies of a business.

Organizational Size

The magnitude of an organization based on aspects such as employee count, revenue, or operational scale.

Structure

The arrangement or organization of components into a coherent, systematic, or orderly whole.