Discussion:EPS
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Discussion Forum Index --> Accounting Questions --> EPS
| 6 May 2008 | |
| I have a basic BEPS question regarding the numerator portion.
I know that when there is a preferred dividend it is subtracted from net income in order to reflect common share holders. But, a preferred dividend is not an income statement item. It is payed out of retained earnings. Additionaly, a preferred dividend is not a part of the calculation to determine net income. So how does removing a balance sheet item (the preferred dividend) from net income reflect common shareholders? Thanks | |
| 6 May 2008 | |
| Preferred dividends reduce income available to distribute to common shareholders. Is this a homework question or CPA exam prep? | |
| 6 May 2008 | |
| Thank you, UTdave1
CPA exam prep. It has been a long time since my accounting classes. So I am now giving the exam a go after the hiatus and I'm just trying to brush off the rust. So, thanks again | |
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