Which of the Following Is Correct Regarding the Effect That

question 30

Multiple Choice

Which of the following is correct regarding the effect that dilutive convertible bonds have on the earnings per share computation?

• A) The number of shares the bonds would convert to is added to the denominator;interest,net of tax,is subtracted from the numerator.
• B) The number of shares the bonds would convert to is added to the denominator;interest net of tax is added to the numerator.
• C) The number of shares the bonds would convert to is subtracted from the denominator;interest,net of tax,is subtracted from the numerator.
• D) The number of shares the bonds would convert to is subtracted from the denominator;interest,net of tax,is added to the numerator.

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Definitions:

Rent Expense

The cost incurred by a business to utilize property or equipment for operational purposes over a certain period.

Adjusting Entry

A log entry prepared at the termination of an accounting interval to apportion profits and outlays to the timeframe in which they really happened.

Unearned Rent Revenue

Income received by a company for rent that has not yet been earned because the rental period has not occurred.