When computing diluted earnings per share, convertible securities are:
Recognized only if they are dilutive.
Ignored.
Recognized only if they are anti-dilutive.
Recognized whether they are dilutive or anti-dilutive.
Choice "A" is correct. Recognized only if they are dilutive.Rule: Convertible securities are recognized when computing diluted EPS only if the conversion is dilutive.Choices "b", "c", and "d" are incorrect, per the above rule.
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