Answered: TRUE OR FALSE Earnings per share is…

TRUE OR FALSE Earnings per share is found by taking the net income for the year divided by the number of common shares outstanding at the end of the year.

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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Question

TRUE OR FALSE

Earnings per share is found by taking the net income for the year divided by the number of common shares outstanding at the end of the year.

Expert Solution

Step 1

Solution:

Earning per share is the per share net income earned by the company.

Earning per share is computed using formula = Earnings available for common stockholders / weighted average outstanding common shares

Earnings available for common stockholders = Net income - Preferred dividend

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