Which of the Following Depicts Earnings Per Share

question 47

Multiple Choice

Which of the following depicts earnings per share?

• A)Net income ÷ number of common shares
• B)Net income ÷ weighted average number of common shares
• C)Net income - preferred dividend) ÷ weighted average number of common shares
• D)Net income - preferred dividend) ÷ number of common shares

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Definitions:

Lower of Cost

An accounting principle requiring that inventory is recorded at the lower of its original cost or current market value.

Long-Term Debt

Borrowings and financial obligations that are due after a period greater than one year, used as a source of long-term financing.

Current Market Value

The present price at which an asset or a service can be bought or sold in the marketplace.

Net Realizable Value

Net Realizable Value is the estimated selling price of goods, minus the estimated costs of completion and the costs necessary to make the sale.