Diluted Earnings Per Share Is a Hypothetical Computation to Warn

question 19

Multiple Choice

Diluted earnings per share is a hypothetical computation to warn shareholders what could happen if:

• A) Loss contingencies turn out adversely.
• B) Convertible securities are converted into ordinary shares.
• C) Extraordinary losses were to recur.
• D) Consideration was given to the loss from operations discontinued during the current period.

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Definitions:

Critical Thinking

A logical, rational, systematic thought process that is necessary to understand, analyze, and evaluate information in order to solve a problem or situation.

Heavy Drinking

The consumption of large quantities of alcohol in a short period, often leading to health risks and social problems.

Sleep Disturbance

Disruptions in the normal sleep cycle, which can include difficulties in falling asleep, staying asleep, or experiencing restful sleep.

Depression

An emotional state marked especially by sadness, inactivity, difficulty in thinking and concentration, a significant increase or decrease in appetite and time spent sleeping, feelings of dejection and hopelessness, and sometimes suicidal tendencies.