Which Statement Is Correct

question 85

Multiple Choice

Which statement is correct?

• A)When convertible securities are redeemed during the year,the income effect and share effect are pro-rated for the diluted EPS calculation.
• B)When convertible securities are issued during the year,the income effect and share effect are not pro-rated for the diluted EPS calculation.
• C)When convertible securities are issued at the beginning of the year,the income effect and share effect are pro-rated for the diluted EPS calculation.
• D)When the right to convert convertible securities expires during the year,the income effect and share effect are not pro-rated for the diluted EPS calculation.

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Definitions:

Accounts Receivable

Funds that clients or customers owe to a company for products or services delivered but not yet compensated for.

Accounts Payable

Liabilities of a business that are due to suppliers and creditors within the short term, typically less than a year.

Treasury Stock

Shares that were issued and subsequently reacquired by the company, reducing the amount of outstanding stock on the open market.

Investing Activities

Financial activities related to the purchase and sale of long-term assets and investments, not including cash reserves.