Which of the following is the basic formula for earnings per share?
A)Net income ÷ Average number of shares of common shares outstanding
B)Net income ÷ Ending number of shares of common shares outstanding
C)Net income ÷ Beginning number of shares of common shares outstanding
D)Net income ÷ Total number of shares of common shares outstanding

Question

Quizplus · Accepted Answer

The basic formula for earnings per share is net income divided by the average number of shares of common shares outstanding. This calculation takes into account any changes in the number of shares outstanding during the reporting period.

Which of the Following Is the Basic Formula for Earnings