In Computations of Weighted Average of Shares Outstanding, When a Stock

question 2

Multiple Choice

In computations of weighted average of shares outstanding, when a stock dividend or stock split occurs, the additional shares are

• A) weighted by the number of days outstanding.
• B) weighted by the number of months outstanding.
• C) considered outstanding at the beginning of the year.
• D) considered outstanding at the beginning of the earliest year reported.

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Definitions:

Exchange Notes

Financial instruments or agreements between parties to swap different forms of financial assets, liabilities, or payments agreed upon conditions and terms.

Receivable

An amount of money owed to a business by its customers or clients for goods or services delivered or used but not yet paid for.

Allowance for Doubtful Accounts

A contra-asset account that reduces accounts receivable to its net realizable value, representing estimated uncollectible amounts.

Liability Account

An accounting record that tracks the money owed by a business to creditors, lenders, and suppliers, part of the company's liabilities.