Multiple answers

Describe the treasury stock method for options and warrants as used in the computation of diluted earnings per share.

When the treasury stock method is used, income is adjusted for the "gain" or "loss" on the treasury stock transaction in the EPS computation.

There is generally no income adjustment in the EPS computation when the treasury stock method is applied.

Under the treasury stock method, accountants assume that hypothetical proceeds from the exercise of $"$in the money" options are used to acquire treasury shares.

The treasury stock method can be used if there are positive or negative incremental shares.

The treasury shares are assumed to be acquired by paying the closing market price at year$-$end.

Under the treasury stock method, accountants assume that hypothetical proceeds from the exercise of options are used to acquire treasury shares, regardless of the current market price.

The treasury shares are assumed to be acquired by paying the average market price for the period of the EPS computation.

The use of the treasury stock method must result in incremental shares to be dilutive.

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