Kieso Ch 16 Intermediate Accounting

12 Questions | Total Attempts: 314

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Kieso Ch 16 Intermediate Accounting - Quiz

Earnings Per Share, Diluitive Securities


Questions and Answers
  • 1. 
    Earnings per share is calculated for
    • A. 

      Preferred stock

    • B. 

      Common stock

    • C. 

      Callable stock

    • D. 

      Divisible stock

  • 2. 
    A simple capital structure consists of
    • A. 

      Only of common stock

    • B. 

      No potential common stock that could dilute earnings no additional common stock which could lower eps

    • C. 

      Securities that could have a diluitive effect

    • D. 

      A and b

  • 3. 
    EPS is deplayed for each component except
    • A. 

      Income from continuing operations

    • B. 

      Discontinued operations

    • C. 

      Extraordinary items

    • D. 

      None of the above

  • 4. 
    The treasury stock method applies to
    • A. 

      Common stock

    • B. 

      Treasury stock

    • C. 

      Stock options and warrants

  • 5. 
    The treasury stock method uses the following calculation
    • A. 

      (Average Market Price-Option Price)/Average Market Price

    • B. 

      (Market Price-Option Price)/Market Price

    • C. 

      (Average Market Price-Option Price)/Market Price

    • D. 

      (Market Price-Option Price)/Average Market Price

  • 6. 
    Which of the following is not a potentially dilutive security?
    • A. 

      Warrants

    • B. 

      Options

    • C. 

      Contingent shares

    • D. 

      Convertible bonds or preferred stock

    • E. 

      Option for $25 when market price is $20

  • 7. 
    Which is not a feature of a convertible bond...?
    • A. 

      Entices investor with lower interest rate

    • B. 

      Get capital without giving up ownership control

    • C. 

      Entices investors with a higher interest rate

  • 8. 
    Compensation is expense is recognized for which method of stock option accounting
    • A. 

      Intrinsic value

    • B. 

      Fair value

  • 9. 
    Compensation expense equals the FMV of the stock minus the exercise price on the date of grant
    • A. 

      Par value

    • B. 

      Intrinsic value

    • C. 

      Fair value

  • 10. 
    Total compensation compute is based on the fair value of the options expected to vest on date optiosn granted to employees
    • A. 

      Par value

    • B. 

      Intrinsic value

    • C. 

      Fair value

  • 11. 
    When instrinsic value is used a footnote disclosure is required for what impact would have been if fair value method was used
    • A. 

      True

    • B. 

      False

  • 12. 
    Compensation expense is not reported if
    • A. 

      Substantially all employees may participate

    • B. 

      Discount from market place is small

    • C. 

      Plan offers no substantive option feature

    • D. 

      All of the above