Which Statement Is Correct About Diluted EPS

question 39

Multiple Choice

Which statement is correct about diluted EPS?

• A)The incremental EPS of the least dilutive item is compared to the basic EPS.
• B)The incremental EPS of the most dilutive item is compared to the basic EPS.
• C)If the incremental EPS is higher than the basic EPS,the item is dilutive.
• D)If the incremental EPS is lower than the basic EPS,the item is anti-dilutive.

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Definitions:

Total Cost Of Goods Manufactured

The complete cost of producing goods during a specific period, including materials, labor, and overhead.

Accounting Cycle

For each accounting period, the process that begins with the recording of business transactions or procedures into a journal and ends with the completion of a post-closing trial balance.

Manufacturing Company

A type of company that produces finished goods from raw materials through the use of labor and machinery.

Merchandise Company

Business that buys a product from a manufacturing company to sell to its customers.