Which of the following statements is true regarding earnings

Which of the following statements is true regarding earnings per share (EPS) disclosures under GAAP?

Multiple Choice

A public company with dilutive securities may choose to report diluted EPS.

All companies are required to report EPS amounts related to net income only.

Basic earnings per share is found by dividing net income available to stockholders by the number of common shares outstanding as of the balance sheet date.

All public companies are required to report EPS amounts related to income from continuing operations, income from discontinued operations, and net income.

Solution

Pulic companies with dilutive securities are manadatorily Required to reports dilutive EPS. - Given Statement is incorrect

All companies are required to report EPS amounts related to net income only - incorrect statement as it needs to report EPS for after deducting preference dividend from net income.

Basic earingsper share is = Net income available for equity shareholders/ Number of common shares outstanding at the balance sheet date.

All punch companies need to report EPS for net income and Dilutive EPS for Dilutive securities or two EPS if it has discontinuing operations income.

Answer is basic earnings per share is found by dividing net income available to Stockholders by the number of common shares outstanding as of the balance sheet date.