Which of the following statements regarding earnings per share is false?

A) It is reported on the income statement.
B) It increases when net income increases.
C) It is calculated using the average number of common shares outstanding during the period.
D) It would not be affected by additional shares of common stock issued during the year.

Question

Marissa Parus · Accepted Answer

Final Answer : D, Explanation :  Additional shares of common stock issued during the year would increase the number of common shares outstanding, which would decrease earnings per share (EPS). Therefore, EPS would be affected by additional shares of common stock issued during the year, making statement D false.

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