Question

hich of the following statements is true? The denominator used in computing earnings per share represents the shares of common stock outstanding on the last day of the accounting period. Net income is not adjusted when computing earnings per share. Earnings per share is an internal measure and is not used by stockholders. By comparing earnings per share of a single corporation over time, a stockholder can evaluate the corporation’s relative earnings performance.

Answer 1

Answer:

By comparing earnings per share of a single corporation over time, a stockholder can evaluate the corporation’s relative earnings performance.

Explanation:

• Earnings per share are often part of a corporation's financial statement. Since the shareholder of the corporation usually has a share or interest in the performance of the company
• the relative earnings performance of the corporation can be estimated by comparing the earnings per share of the corporation over time.
• so correct answer is By comparing earnings per share of a single corporation over time, a stockholder can evaluate the corporation’s relative earnings performance.