Question :
141. The accounting for stock options complex because firms often include : 1245766
141. The accounting for stock options is complex because firms often include A. service, only. B. combinations of service and performance, only.C. combinations of service, performance, and market conditions, only.D. combinations of service, performance, and market conditions and firms can restructure their plans. E. none of the above.
142. The accounting for employee stock options involves the firm debiting _____ and crediting _____ for the amortized amount of the fair value of the stock options on the date of the grant over the requisite service period. A. Compensation Expense; Additional Paid-In Capital (Stock Options) B. Stock Option Expense; Additional Paid-In Capital (Stock Options) C. Stock Option Expense; Retained EarningsD. Compensation Expense; Retained EarningsE. Compensation Expense; Common Stock
143. Corporations often sell, or exchange for goods and services, various call options on their shares. Which of the following is not true? A. A call option gives the holder the right to acquire shares of common stock at a fixed or determinable price, called the strike price or exercise price. B. If the market price of the shares increases above the exercise price, the holder of the option can benefit by exercising the option to purchase shares. C. The excess of the exercise price over the market price is the option’s intrinsic value. D. Many firms pay part of the compensation of some employees by issuing call options on their own shares referring to these arrangements as employee stock options (ESOs).E. Firms may also sell or exchange call options for goods and services with counterparties other than employees.
144. Which of the following is not true regarding stock rights? A. U.S. GAAP does not require recognition of the rights on the date of the grant. B. The granting of stock rights to current shareholders requires several accounting entries.C. Shareholders may exercise the stock rights or sell them to others. D. IFRS does not require recognition of the rights on the date of the grant. E. When holders exercise the stock rights, the firm records the issue of shares at the price paid just as it records the issue of new shares for cash.
145. Which of the following is not true regarding stock rights? A. U.S. GAAP does not require recognition of the rights on the date of the grant. B. Firms often issue stock rights to raise new capital from current employees. C. Shareholders may exercise the stock rights or sell them to others. D. IFRS does not require recognition of the rights on the date of the grant. E. When holders exercise the stock rights, the firm records the issue of shares at the price paid just as it records the issue of new shares for cash.
146. Which of the following is true? A. Employees receive stock rights as a form of compensation. B. Employees in general may not transfer or sell stock rights to others.C. Stock rights give shareholders the right to purchase shares of common stock at half-price. D. Stock rights usually do not trade in public markets. E. Firms grant stock rights to current shareholders.
147. When employees exercise their employee stock options, the firm debits _____ for the proceeds, debits _____ for any amounts credited to that account, credits _____ for the par value of the shares issued and credits _____ for any excess of the cash received plus the amount amortized over the par value of the shares issued. A. Cash; Additional Paid-In Capital (Stock Options); Common Stock; Additional Paid-In Capital B. Cash; Additional Paid-In Capital; Common Stock; Additional Paid-In Capital (Stock Options)C. Common Stock; Additional Paid-In Capital (Stock Options); Cash; Additional Paid-In CapitalD. Common Stock; Additional Paid-In Capital; Cash; Additional Paid-In Capital (Stock Options)E. Additional Paid-In Capital (Stock Options); Common Stock; Additional Paid-In Capital; Cash
148. Which of the following is true? A. Employees receive stock rights as a form of compensation. B. Employees in general may not transfer or sell stock rights to others.C. Shareholders may exercise the stock rights or sell them to others. D. The stock rights usually do not trade in public markets. E. Firms grant stock rights to current employees.
149. Which of the following is not true regarding stock warrants? A. Firms issue stock warrants to the general investing public for cash or attached to bonds. B. Holders of a bond or preferred stock with common stock warrants attached can detach and redeem the warrants separately from the bond or preferred stock.C. Holders of a bond or preferred stock with common stock warrants attached receives periodic interest or preferred dividends and holds a call option to purchase common shares. D. U.S. GAAP and IFRS require the firm to measure the fair value of the stock warrants separately from the value of the associated bond or preferred stock and allocate the issue price between the two securities.E. Firms issue stock warrants to their employees for cash or attached to bonds.
150. Firms sometimes issue bonds or preferred stock with stock warrants. Which of the following is/are not true? A. The stock warrant permits the holder to exchange the warrant and a specified amount of cash for shares of the firm’s common stock.B. The preferred shareholders benefit if the market price of the common stock increases. C. Firms may issue preferred stock with stock warrants attached.D. Attaching a stock warrant permits the firm to issue preferred stock with a lower dividend rate. E. none of the above
