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computation and presentation? ent is incorrect regarding diluted earnings per share a. Diluted EPS is calculated by adiusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares. b.. The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted EPS. C. Diluted earnings per share shall be reported for all periods presented, even if it equals basic earnings per share. d. None of these. 10. Potential ordinary shares do not include a. Share warrants and options b. Debt or equity instruments that are convertible into ordinary shares C. Shares which would be issued upon the satisfaction of certain conditions resulting from contractual arrangements d. Redeemable preference shares 11. Dilution is a. A reduction in earnings per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upor the satisfaction of specified conditions. b. An increase in loss per share resulting from the assumption tha convertible instruments are converted, that options or warrant are exercised, or that ordinary shares are issued upon th satisfaction of specified conditions. C. Either a or b. d. Neither a nor b.

computation and presentation? ent is incorrect regarding diluted earnings per share a. Diluted EPS is calculated by adiusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares. b.. The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted EPS. C. Diluted earnings per share shall be reported for all periods presented, even if it equals basic earnings per share. d. None of these. 10. Potential ordinary shares do not include a. Share warrants and options b. Debt or equity instruments that are convertible into ordinary shares C. Shares which would be issued upon the satisfaction of certain conditions resulting from contractual arrangements d. Redeemable preference shares 11. Dilution is a. A reduction in earnings per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upor the satisfaction of specified conditions. b. An increase in loss per share resulting from the assumption tha convertible instruments are converted, that options or warrant are exercised, or that ordinary shares are issued upon th satisfaction of specified conditions. C. Either a or b. d. Neither a nor b.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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9. Which statement is incorrect regarding diluted earnings per share computation and presentation? a. Diluted EPS is calculated by adiusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares. b.. The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted EPS. C. Diluted earnings per share shall be reported for all periods presented, even if it eguals basic earnings per share. d. None of these. 10. Potential ordinary shares do not include a. Share warrants and options b. Debt or equity instruments that are convertible into ordinary shares C. Shares which would be issued upon the satisfaction of certain conditions resulting from contractual arrangements d. Redeemable preference shares 11. Dilution is a. A reduction in earnings per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions. b. An increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions. C. Either a or b. d. Neither a nor b. 12. In determining whether potential ordinary shares are dilutive or antidilutive, the profit figure used as the 'control number' is a. Profit after taxation (including discontinued operations). b. Profit from continuing operations. C. Profit before tax (including discontinued operations). d. Retained profit for the year after dividends.
Transcribed Image Text:9. Which statement is incorrect regarding diluted earnings per share computation and presentation? a. Diluted EPS is calculated by adiusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares. b.. The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted EPS. C. Diluted earnings per share shall be reported for all periods presented, even if it eguals basic earnings per share. d. None of these. 10. Potential ordinary shares do not include a. Share warrants and options b. Debt or equity instruments that are convertible into ordinary shares C. Shares which would be issued upon the satisfaction of certain conditions resulting from contractual arrangements d. Redeemable preference shares 11. Dilution is a. A reduction in earnings per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions. b. An increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions. C. Either a or b. d. Neither a nor b. 12. In determining whether potential ordinary shares are dilutive or antidilutive, the profit figure used as the 'control number' is a. Profit after taxation (including discontinued operations). b. Profit from continuing operations. C. Profit before tax (including discontinued operations). d. Retained profit for the year after dividends.
13. Options have dilutive effect only when they are a. In the money b. At the money C. Out of the money d. Give me the money 14. At what point are dilutive potential shares deemed to have been converted into ordinary shares? a. At the start of the period. b. At the end of the period. C. The date of the issue of the dilutive shares. d. At the start of the period or, if later, the date of the issue of the potential shares. 15. In determining earnings per share, interest expense, net of applicable income taxes, on convertible debt which is dilutive should be a. Ignored for diluted earnings per share. b. Added back to profit for diluted earnings per share. c. Deducted from profit for diluted earnings per share. d. None of these. 16. For the purpose of calculating diluted earnings per share, which of the following will not require an after-tax adjustment: a. Any dividends relating to dilutive potential shares, deducted in arriving at profit. b. Any interest recognized in the period, related to dilutive potential shares. c. Any other changes in income (or expense) that would result from the conversion of the dilutive potential shares. d. Any dividends, which are proposed on existing shares after the period end.
Transcribed Image Text:13. Options have dilutive effect only when they are a. In the money b. At the money C. Out of the money d. Give me the money 14. At what point are dilutive potential shares deemed to have been converted into ordinary shares? a. At the start of the period. b. At the end of the period. C. The date of the issue of the dilutive shares. d. At the start of the period or, if later, the date of the issue of the potential shares. 15. In determining earnings per share, interest expense, net of applicable income taxes, on convertible debt which is dilutive should be a. Ignored for diluted earnings per share. b. Added back to profit for diluted earnings per share. c. Deducted from profit for diluted earnings per share. d. None of these. 16. For the purpose of calculating diluted earnings per share, which of the following will not require an after-tax adjustment: a. Any dividends relating to dilutive potential shares, deducted in arriving at profit. b. Any interest recognized in the period, related to dilutive potential shares. c. Any other changes in income (or expense) that would result from the conversion of the dilutive potential shares. d. Any dividends, which are proposed on existing shares after the period end.
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