what is the difference between basic and diluted earnings per share?

Question $52$ options:

$1)$

Basic uses only common stock, while diluted includes potential common stock

$2)$

Basic is for public companies, diluted for private companies

$3)$

Basic is required by GAAP, diluted is optional

$4)$

Basic uses market value, diluted uses book value

$5)$

There is no difference