Which of the Following Statements Is Correct

question 85

Multiple Choice

Which of the following statements is correct?

• A)The most widely quoted measure of a company's earnings performance is return on equity.
• B)Earnings per share is calculated for a company's preferred stock.
• C)Investors need to understand that the value of a company's earnings per share is affected by its choices of accounting principles and assumptions.
• D)The book value per share measures the market value of a corporation's stock.

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Definitions:

Material Amount

A sum of money that is large enough to influence the economic decisions of users based on the financial statements of an entity.

Reporting Period

The specific time span covered by financial statements, typically one fiscal year or quarter, for which an entity reports its financial performance and position.

Carrying Amount

The book value of assets and liabilities, calculated as the original cost minus any accumulated depreciation, impairment, or amortization.

Fair Value

The expected proceeds from an asset sale or the financial commitment for a liability shift in an orderly engagement among market participants at the time of determining value.