Which of the following will result in an increase in earnings per share?
A)Accruing expenses at year-end.
B)Selling additional shares of common stock during the year.
C)Accruing revenue at year-end.
D)Receiving cash from a tenant that is recorded as unearned revenue.

Question

Quizplus · Accepted Answer

Accruing revenue at year-end can increase earnings per share by recognizing additional revenue that has been earned but not yet recorded. This increases the numerator of the earnings per share calculation, which is net income. Accruing expenses at year-end typically has the opposite effect, as it increases expenses and decreases net income and earnings per share. Selling additional shares of common stock dilutes earnings per share because it increases the number of shares outstanding without a corresponding increase in net income. Receiving cash from a tenant that is recorded as unearned revenue does not directly impact earnings per share, as it is a liability and not part of net income.

Which of the Following Will Result in an Increase in Earnings