11. Many commentators believe that the trend of earnings per share (EPS) is a more reliable indicator of underlying performance than the trend of the net profit for the year. Which of the following statements supports this view? A Net profit can be manipulated by the choice of accounting policies but EPS cannot be manipulated in this way. B EPS takes into account the additional resources made available to earn profit when new shares are issued for cash, whereas net profit does not. C The disclosure of a diluted EPS figure is a forecast of the trend of profit for future periods. D The comparative EPS is restated where a change in accounting policy affects the previous year’s profits. 12. Which TWO of the following statements about IAS 20 Accounting for Government Grants and Disclosure of Government Assistance are true? A A government grant related to the purchase of an asset must be deducted from the carrying amount of the asset in the statement of financial position. B A government grant related to the purchase of an asset should be recognised in profit or loss over the life of the asset. C Free marketing advice provided by a government department is excluded from the definition of government grants. D Any required repayment of a government grant received in an earlier reporting period is treated as prior period adjustment

Which of the following statements is correct about the price-to-earnings (P/E) ratio? 0 a Trailing EPS is always preferred than forward EPS for calculating P/E ratio. O b. If there are hybrid holders, one should use diluted EPS. O c. Gains and losses from asset sales should be taken into consideration when calculating P/E ratio. O d The valuation from P/E ratio is irrelevant with the accounting standard that firms practice. 0 e. None of the above.

If a company increases its financial leverage, how is the impact on Earnings Per Share (EPS)?a.EPS decreasesb.No impact on EPSc.EPS increasesd.EPS becomes negativeCLEAR MY CHOICE

Earnings per share (EPS) may be determined by ______. (Check all that apply.)Multiple select question.dividing the stock price by the P/E ratiodividing the P/E ratio by the stock pricedividing net income less preferred dividends by the average common shares outstandingmultiplying the stock price by the P/E ratio

Which TWO of the following do NOT need to be removed from an entity’s net profit in a statement of profit or loss in order to calculate the earnings figure to be used in the earnings per share calculation? A Redeemable preference share dividends B Irredeemable preference share dividends C Profit attributable to the non‐controlling interest D An error in expenses discovered after the financial statements have been authorised for issue E Ordinary dividends

If retained earnings increases from the beginning of the year to the end of the year, then: a. profit is greater than dividends paid. b. additional investments are greater than profit. c. dividends paid are greater than profit. d. additional investments are less than losses.