Basic Earnings Per Share

question 42

Multiple Choice

Basic earnings per share

• A) is calculated by dividing income available to common shareholders for the period by the dollar value in the common shares account.
• B) is the only ratio that must be presented in the financial statements for publicly traded companies.
• C) is frequently compared across companies in the same industry.
• D) is the only ratio that must be presented in the financial statements for both publicly traded companies and privately held companies.

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Definitions:

Itemized Deduction

Itemized deductions are specific expenses allowed by the IRS that can be deducted from taxable income to reduce the amount of tax owed.

Moving Expenses

Costs incurred for relocating, which in certain situations, may be deductible for tax purposes.

Above-the-line Deduction

A deduction from gross income that can be taken without itemizing deductions, reducing adjusted gross income, and available to all taxpayers who qualify.

Moving Expenses

Costs incurred by an individual or household for relocating to a new residence, which can sometimes be deducted for tax purposes if they are related to starting a new job.