When Calculating Earnings Per Share, Preferred Dividends Are

question 103

Multiple Choice

When calculating earnings per share, preferred dividends are:

• A)added to net income in the numerator of the EPS calculation.
• B)added to common shares in the denominator of the EPS calculation.
• C)subtracted from common shares in the denominator of the EPS calculation.
• D)subtracted from net income in the numerator of the EPS calculation.

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Definitions:

Differential Reporting

Provision within accounting standards or a regulatory framework that facilitates different reporting requirements for different categories of entities.

Accounting Policies

The specific principles, bases, conventions, rules, and practices applied by an entity in preparing and presenting financial statements.

AASB 6

Refers to the Australian Accounting Standards Board standard that deals with the exploration for and evaluation of mineral resources.

AASB 6

Exploration for and Evaluation of Mineral Resources, an Australian standard that governs the financial reporting of exploration and evaluation expenditures in the mining sector.