TRUE OR FALSE Earnings per share is found by taking the net income for the year divided by the number of common shares outstanding at the end of the year.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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TRUE OR FALSE

Earnings per share is found by taking the net income for the year divided by the number of common shares outstanding at the end of the year.

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Solution:

Earning per share is the per share net income earned by the company.

Earning per share is computed using formula = Earnings available for common stockholders / weighted average outstanding common shares

Earnings available for common stockholders = Net income - Preferred dividend

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