Earnings per common share result from dividing net income
A)minus preferred stock dividends by the weighted-average number of outstanding common shares during the accounting period.
B)by the weighted-average number of outstanding common shares during the accounting period.
C)minus common stock dividends by the end-of-year number of outstanding common shares.
D)minus preferred stock dividends by the end-of-year number of outstanding common shares.
E)by the end-of-year number of outstanding common shares.

Question

Quizplus · Accepted Answer

Earnings per common share are calculated by dividing the net income minus any preferred stock dividends by the weighted-average number of outstanding common shares during the accounting period. This provides a per-share amount of earnings for the common shareholders.

Earnings Per Common Share Result from Dividing Net Income