Potential ordinary shares include the following, except: *financial liabilities (or equity instruments), including preference shares, that are convertible into ordinary sharesoptions and warrantsshares that would be issued upon the satisfaction of conditions resulting from contractual arrangements, such as the purchase of a business, or other assetstreasury shares that have been cancellednone of the above Which statement is incorrect? *Dilution is an increase in earnings per share when convertible instruments are converted to ordinary shares.Diluted EPS is required when there are potential shares outstanding.Dilutive potential shares shall be deemed to have been converted into shares at the start of the period or, if later, the date of the issue of the potential sharesOptions and warrants are dilutive, when they would result in the issue of shares for less than the average market price of shares during the period.none of the above The book value per shareis usually a close approximation of the market price per share.is the same as the par value per share.may be useful in determining the trend of a shareholders’ per share equity in a corporation.always falls within the annual range of a company's market value per share. Book value per share is ____ oriented while market value per share is ____oriented. *short term; long termlong term; short termfuture; historicalhistorical; future

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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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Potential ordinary shares include the following, except: *

financial liabilities (or equity instruments), including preference shares, that are convertible into ordinary shares
options and warrants
shares that would be issued upon the satisfaction of conditions resulting from contractual arrangements, such as the purchase of a business, or other assets
treasury shares that have been cancelled
none of the above

Which statement is incorrect? *

Dilution is an increase in earnings per share when convertible instruments are converted to ordinary shares.
Diluted EPS is required when there are potential shares outstanding.
Dilutive potential shares shall be deemed to have been converted into shares at the start of the period or, if later, the date of the issue of the potential shares
Options and warrants are dilutive, when they would result in the issue of shares for less than the average market price of shares during the period.
none of the above

The book value per share

is usually a close approximation of the market price per share.
is the same as the par value per share.
may be useful in determining the trend of a shareholders’ per share equity in a corporation.
always falls within the annual range of a company's market value per share.

Book value per share is ____ oriented while market value per share is ____oriented. *

short term; long term
long term; short term
future; historical
historical; future

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