Performing Accounting Research

Are the following statements true or false? Indicate the Codification reference that supports your answer.

a$.$ Cumulative preferred dividends for the current year are subtracted from net income even though a company did not declare a

preferred dividend payment.

FASB ASC

b$.$ Basic EPS should be restated in prior years for the effects of contingently issuable shares when conditions change that result in these

shares becoming issuable.

FASB ASC

$.$

$x$

c$.$ A company that reports a discontinued operation in a period shall use income from continuing operations as the control number in

determining whether those potential common shares dilutive or antidilutive.

FASB ASC

d$.$ Stock options will have a dilutive effect under the treasury stock method only when the average market priec of the common stock

during the period is less than the exercise price of the stock options.

FASB ASC

$.$

$-$

e$.$ In calculating diluted EPS, convertible preferred stock is considered to have been converted to common stock as of the beginning of

the year, regardless of the issuance date of the preferred stock.

FASB ASC

$.$

f$.$ When there is a year$-$to$-$date loss, potential common shares should never be included in the computation of diluted EPS, because to

do so would be antidilutive.