When Using the If-Converted Method to Compute Diluted Earnings Per

question 47

Multiple Choice

When using the if-converted method to compute diluted earnings per share,convertible securities should be

• A) included only if antidilutive.
• B) included only if dilutive.
• C) included whether dilutive or not.
• D) not included.

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Definitions:

Cost System

A method used to allocate costs to products, services, projects, or departments to facilitate financial analysis, budgeting, and managerial decision-making.

Gallons

A unit of volume measurement used primarily for liquids, commonly used in the United States.

Work in Process

Inventory representing partially finished goods that are in the process of being converted from raw materials to complete products.

Standard Costs

Predetermined costs for materials, labor, and overhead used as benchmarks for measuring performance.