$1.$ When calculating diluted earnings per share, convertible bonds are

a$)$ ignored.

b$)$ assumed converted whether they are dilutive or antidilutive.

c$)$ assumed converted only if they are antidilutive.

d$)$ assumed converted only if they are dilutive.

$2.$ Dilutive convertible securities must be used in the calculation of

a$)$ basic earnings per share only.

b$)$ diluted earnings per share only.

c$)$ diluted and basic earnings per share.

d$)$ silly question: such securities are never included.

$3.$ In calculating diluted earnings per share, the equivalent number of convertible preferred shares is added as anmount should

$5.$ In applying the treasury stock method to determine the dilutive effect of options and warrants, the proceeds assumed to be received upon exercise of the options and warrants

a$)$ are used to calculate the number of common shares repurchased at the average market price, when calculating diluted earnings per share.

b$)$ are added, net of tax, to the numerator of the calculation for diluted earnings per share.

c$)$ are disregarded in the calculation of earnings per share if the exercise price of the options and warrants is less than the ending market price of common shares.

d$)$ are not included in the calculation.

$6.$ When applying the treasury stock method, the price of the common shares used for the assumed repurchase is the

a$)$ market price at the end of the year.

b$)$ average market price during the year.

c$)$ market price at the beginning of the year.

d$)$ market price at the time the options or warrants were granted.

$7.$ Antidilutive securities

a$)$ should be included in the calculation of diluted earnings per share but not basic earnings per share.

b$)$ are those whose inclusion in earnings per share calculations would cause basic earnings per share to exceed diluted earnings per share.

c$)$ include call options and warrants whose exercise price is less than the average market price of common shares.

d$)$ should be ignored in all earnings per share calculations.

$8.$ Assume a corporation has two potentially dilutive convertible securities outstanding. The one that should be used first to calculate diluted earnings per share is the security with the

a$)$ greater earnings adjustment.

b$)$ greater earnings per share adjustment.

c$)$ smaller earnings adjustment.

d$)$ smaller earnings per share adjustment.

$9.$ The reverse treasury stock method is used for

a$)$ written call options.

b$)$ written put options.

c$)$ convertible preferred shares.

d$)$ convertible bonds.

$10.$ Which of the following statements is correct?

a$)$ Options that are in the money are ignored in earnings per share calculations.

b$)$ Options that are out of the money are ignored in earnings per share calculations.

c$)$ Contingently issuable shares are never included in diluted earnings per share calculations.

d$)$ The treasury stock method is used for written put options.

$11.$ The if$-$converted method of calculating earnings per share data assumes conversion of convertible securities as of the

a$)$ beginning of the earliest period reported $($or at time of issuance, if later$).$

b$)$ beginning of the earliest period reported $($regardless of time of issuance$).$

c$)$ middle of the earliest period reported $($regardless of time of issuance$).$

d$)$ ending of the earliest period reported $($regardless of time of issuance$).$