If There Has Been a Stock Split During the The Year,which

question 108

Multiple Choice

If there has been a stock split during the the year,which of the following statements is true?

• A) When calculating the weighted average number of shares, it is not necessary to restate the number of shares outstanding as if the stock split had occurred at the beginning of the year.
• B) When calculating the weighted average number of shares, it is necessary to restate the number of shares outstanding as if the stock split had occurred at the beginning of the year.
• C) When calculating the weighted average number of shares, it is necessary to ignore the effect of the stock split.
• D) When calculating the weighted average number of shares, it is necessary to restate the number of shares outstanding as if the stock split had occurred from the day of incorporation.

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Definitions:

Useful Life

The estimated duration a fixed asset is expected to be economically usable, with normal repairs and maintenance.

Straight-Line Method

A depreciation technique that allocates an equal amount of depreciation to each year of the asset's useful life.

Salvage Value

The estimated resale value of an asset at the end of its useful life, used in calculating depreciation.

Depreciation Expense

The allocated amount of an asset’s cost expensed over its useful life to account for the decline in its value over time.