When a Company Has Negative Net Income and Potentially Dilutive

question 100

Multiple Choice

When a company has negative net income and potentially dilutive securities, the calculation of EPS results in:

• A)No EPS being reported.
• B)Diluted EPS i.e.all potentially dilutive securities are included in the calculation (whether dilutive or anti-dilutive).
• C)Diluted EPS being reported and it will be more than basic EPS.
• D)None of these choices are correct.

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Definitions:

Bank Balance

The total amount of funds available in a bank account at a given moment, including all deposits and subtracting any withdrawals.

Outstanding Checks

Checks that have been written and recorded in the accounting books but have not yet been cashed or cleared by the bank.

Month-end Bank Statement

A document provided by a bank summarizing the account’s activity and balances over the last month, used for reconciling the bank account.

Erroneously Charged

Refers to a financial transaction or fee that has been incorrectly applied to an account.