For Stock Splits and Stock Dividends,while It Is Possible to State

question 95

Essay

For stock splits and stock dividends,while it is possible to state the number of shares as beginning-of-year equivalents,it makes more sense to use end-of-year equivalents because financial statement readers are evaluating EPS after the end of the year.Explain why the adjustment for stock splits and stock dividends is standardized.

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Definitions:

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including material and labor expenses.

Merchandising Company

A business that purchases finished products and sells them to consumers without further processing.

Sunk Cost

Costs that have already been incurred and cannot be recovered or changed.

Alternative

An option or choice among several available in a given situation, often considered when making decisions.