Which of the Following Is Not True Regarding Diluted Earnings

question 16

Multiple Choice

Which of the following is not true regarding diluted earnings per share (DEPS) when the subsidiary has outstanding dilutive securities which may require the issuance of subsidiary company shares only?

• A)​The calculation of consolidated DEPS becomes a two-stage process where the DEPS of the subsidiary must first be calculated.
• B)​The controlling interest's share of net income is divided by the number of outstanding parent shares.
• C)​Both the income of the parent and subsidiary would be the income as shown in their respective income distribution schedules, except for the inclusion of the parent's share of subsidiary income.
• D)​The DEPS of the subsidiary is a component of the calculation of consolidated DEPS.

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Definitions:

Selective Attention

The process by which a person focuses on one input or task while ignoring other stimuli or information that is also present.

Neural Fatigue

A temporary reduction in the ability of neurons to generate responses, often due to prolonged activity or stimulation.

Amplitude

The maximum extent of a vibration or oscillation, measured from the position of equilibrium.

Frequency

The rate at which a cyclic or periodic event occurs, typically measured in cycles per unit time.