When a Firm Has Securities Outstanding That, If Exchanged for Shares

question 84

Multiple Choice

When a firm has securities outstanding that, if exchanged for shares of common stock, would decrease basic earnings per share by _____ or more, generally accepted accounting principles require a dual presentation: basic earnings per share and diluted earnings per share.

• A)1 percent
• B)3 percent
• C)10 percent
• D)20 percent
• E)30 percent

Understand the definition and application of accruals in accounting.

Identify tax deductible expenses and calculate capital gains or losses.

Understand the concept of depreciation and its impact on financial statements.

Recognize different tax bases and calculate effective tax rates.

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Definitions:

Ectoderm

The outermost layer of cells or tissue of an embryo in early development, giving rise to the outer layer of skin, central and peripheral nervous systems, eyes, inner ear, and many connective tissues.

Endoderm

In early embryonic development, the most internal cell or tissue layer that evolves into the lining of the digestive and respiratory systems.

Metencephalon

Second most posterior division of the embryonic brain; becomes the pons and cerebellum in the adult.

Cerebellum

A major structure of the hindbrain that controls fine motor skills, balance, and coordination.