ACCT 301B Conceptual Questions 15,18,19

Dilutive convertible securities must be used in the computation of

diluted earnings per share only

Detachable stock warrants outstanding should be classified as

paid-in capital

The issuance of warrants arises under all of the following situations except to:

give existing stockholders the preemptive right to purchase additional stock.

A temporary difference that would result in a deferred tax liability is

Excess of tax depreciation over nancial accounting depreciation.

Royalties are recognized when received in year 3 for income tax purposes and recognized when earned in year 4 for financial statement purposes. This an example of a

Temporary difference that gives rise to deferred taxes.

A net operating loss (NOL) occurs for tax purposes in a year when tax-deductible expenses exceed taxable revenues. Companies can reduce future taxable income on the amount of NOL in the following way:

may carry the net operating loss forward indefinitely.

A deferred tax liability represents the:

increase in taxes payable in future years as a result of taxable temporary differences

Which of the following may decrease the annual pension expense amount?

Actual return on plan assets.