The Formula for Computing Earnings Per Share Is Net Income

question 134

Multiple Choice

The formula for computing earnings per share is net income

• A) divided by the ending common shares outstanding.
• B) divided by the weighted-average number of common shares outstanding.
• C) less preferred dividends divided by the ending common shares outstanding.
• D) less preferred dividends divided by the weighted-average number of common shares outstanding.

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Definitions:

Net Earnings

The amount of income left after deductions, such as taxes and social security charges, have been subtracted from gross income.

Paycheck

A document or electronic transfer that provides payment for employment services rendered, typically issued periodically at fixed intervals, like weekly or monthly.

Wage And Tax Statement

An official document, often referred to as a W-2 form in the United States, that reports an employee's annual wages and the amount of taxes withheld from their paycheck.