Which of the following is correct about the difference between basic earnings per share (EPS)and diluted earnings per share?
A)Basic EPS uses total common shares outstanding,whereas diluted EPS uses the weighted-average number of common shares.
B)Basic EPS is not a required disclosure,whereas diluted EPS is required disclosure.
C)Basic EPS is not adjusted for the potential dilutive effects of complex financial structures,whereas diluted EPS is adjusted.
D)Basic EPS uses comprehensive income in its calculation,whereas diluted EPS does not.

Question

Quizplus · Accepted Answer

Basic EPS does not take into account the potential dilutive effects of complex financial structures such as stock options, whereas diluted EPS does account for potential dilution by including the impact of such items. Basic EPS uses total shares outstanding, while diluted EPS uses the weighted-average number of common shares. Both basic and diluted EPS are required disclosures for publicly traded companies. Comprehensive income is not used in the calculation of basic or diluted EPS.

Which of the Following Is Correct About the Difference Between