The adjustment to the weighted-average shares for retired shares is the same as for issuing new shares except:
A) The shares are deducted rather than added.
B) The shares are added rather than deducted.
C) The shares are treated as being acquired at the end of the year.
D) The shares are treated as being acquired at the beginning of the year.

Question

Quizplus · Accepted Answer

When retiring shares, they are deducted from the total shares outstanding, which would decrease the weighted-average number of shares used in the calculation of earnings per share. Therefore, the adjustment for retired shares is to subtract them from the total shares outstanding rather than adding them as with issuing new shares.

The Adjustment to the Weighted-Average Shares for Retired Shares Is