Which of the Following Statements Is Not True Regarding Earnings

question 90

Multiple Choice

Which of the following statements is not true regarding earnings per share?

• A)Earnings per share is useful in comparing earnings performance across companies at the same point in time.
• B)Earnings per share is useful in comparing earnings performance for the same company over time.
• C)Earnings per share is calculated as net income minus dividends on preferred stock all divided by the average number of common shares outstanding.
• D)Earnings per share is forecasted by financial analysts.

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Definitions:

Purchase Returns

Goods returned by the buyer to the supplier usually due to defects or quality issues, sometimes leading to a refund or credit.

Sales Salary Expense

The total amount of salary and wages paid to employees involved in the sales process, reflected as an expense on the income statement.

Departmental Gross Profit

The gross profit of a specific department within a store or company, calculated by subtracting the cost of goods sold in that department from its sales revenue.

Assets

Properties (resources) of value owned by a business (cash, supplies, equipment, land).