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PSBA Integrated Review Financial Accounting and Reporting - Theory Christian Aris Valix Basic Earnings Per Share

This document contains a practice test on basic earnings per share (EPS) concepts. It consists of 12 multiple choice questions testing understanding of key EPS calculations including: when EPS is required to be disclosed; the figures used to calculate EPS; treatment of events like share splits, new share issues, and discontinued operations in the EPS calculation; and where EPS should be presented in the financial statements. The questions cover topics like computing basic EPS, adjusting weighted average shares for events, and presenting both basic and diluted EPS.

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328 views2 pages

PSBA Integrated Review Financial Accounting and Reporting - Theory Christian Aris Valix Basic Earnings Per Share

This document contains a practice test on basic earnings per share (EPS) concepts. It consists of 12 multiple choice questions testing understanding of key EPS calculations including: when EPS is required to be disclosed; the figures used to calculate EPS; treatment of events like share splits, new share issues, and discontinued operations in the EPS calculation; and where EPS should be presented in the financial statements. The questions cover topics like computing basic EPS, adjusting weighted average shares for events, and presenting both basic and diluted EPS.

Uploaded by

Thalia Uy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PSBA Integrated Review

Financial Accounting and Reporting – Theory Christian Aris Valix


Basic earnings per share

1. EPS disclosures are

a. Required for all public and nonpublic entities


b. Required for public entities and encouraged for nonpublic entities
c. Encouraged for public entities and required for nonpublic entities
d. Not required

2. EPS shall be reported for all of the following, except

a. Continuing operations
b. Discontinued operations
c. Net income
d. Net cash provided by operating activities

3. In computing basic EPS, the amount of preference dividends on noncumulative preference


shares should be

a. Deducted from net income whether declared or not


b. Deducted from net income only when declared
c. Added to net income only when declared
d. Added to net income whether declared or not

4. For EPS computation, if a share split is issued in the current year,

a. The weighted average shares outstanding is adjusted for current year and previous years.
b. The weighted average shares outstanding is adjusted for the current year only.
c. The weighted average shares outstanding is adjusted for the previous periods only.
d. The share split is ignored.

5. EPS should be computed on the basis of

a. Preference shares
b. Voting ordinary shares
c. Voting and nonvoting ordinary shares
d. Voting ordinary shares and preference shares

6. When an entity issues both consolidated and separate financial statements, EPS information
is required

a. For both sets of financial statements


b. In neither set of financial statements
c. Only for consolidated financial statements
d. Only for separate financial statements
7. If a new issue of shares for cash is made between the year-end and the date the financial
statements are authorized for issue

a. The EPS for both the current year and previous year are adjusted.
b. The EPS for the current year only is adjusted.
c. No adjustment is made to EPS.
d. Diluted EPS is only adjusted.

8. Which figure for earnings does EPS information use?

a. Net income attributable to ordinary equity holders of the parent


b. Net income attributable to ordinary equity holders of the parent and preference
shareholders
c. Income before taxation
d. Income from continuing operations

9. Shares which are issued to settle a liability are included in the EPS computation from

a. The completion of services


b. The settlement date
c. Date of contract for services
d. Halfway through the rendering of services

10. Where in the financial statements should both basic and diluted EPS be presented

a. In the notes to financial statements


b. In the statement of cash flows
c. In the income statement
d. In the management decision analysis

11. An entity that reports a discontinued operation shall present both basic and diluted EPS for
the discontinued operation

a. Only on the face of income statement


b. In the notes
c. Either on the face of income statement or in the notes
d. It should not be presented anywhere

12. The following are treated retrospectively in computing weighted average shares outstanding,
except

a. Share split
b. Bonus issue
c. Shares issued for land
d. Share dividend

END

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