In determining earnings per share dividends for the current year on noncumulative preferred stock should be

Question

Quizplus · Accepted Answer

Dividends for the current year on noncumulative preferred stock should be deducted from net income only if they have been declared. This is because noncumulative preferred dividends do not accumulate if not declared in a given year, and therefore, only affect earnings per share calculations when actually declared.

In Determining Earnings Per Share Dividends for the Current Year