Question : 81. Which of the following is/are not true concerning an employee : 1230389

81. Which of the following is/are not true concerning an employee stock options’ time value element? A. The time value element results from the possibility of increases in the market price of the stock during the exercise period. B. Time value is larger the longer the exercise period and the more volatile the market price of the stock. C. A stock option whose exercise price exceeds the current market price has economic value because of the possibility that the market price will exceed the exercise price on the exercise date. D. A stock option whose exercise price has zero intrinsic value has economic value because of the possibility that on the exercise date there would be positive intrinsic value. E. Stock options with exercise prices exceeding than the current market price of the stock have a higher value, other things equal, than stock options with exercise prices less than the current market price of the stock.

82. The accounting for employee stock options involves A. the measurement of the fair value of stock options on the date of the grant using an option-pricing model that incorporates information about the current market price, the exercise price, the expected time between grant and exercise, the expected market price volatility of the stock, the expected dividends, and the risk-free interest rate. B. calculating total compensation cost as the number of options the firm expects to vest times the fair value per option. C. factoring in the firms use of their historical experience on forfeitures due to employees terminating employment prior to vesting to estimate the expected number of options that will vest. D. amortizing the fair value of the stock options on the date of the grant over the requisite service period, which is the expected period of benefit. E. all of the above

83. The accounting for employee stock options does not involve A. the measurement of the fair value of stock options on the date of the grant using an option-pricing model that incorporates information about the current market price, the exercise price, the expected time between grant and exercise, the expected market price volatility of the stock, the expected dividends, and the risk-free interest rate. B. calculating total compensation cost as the number of options the firm expects to vest times the fair value per option. C. factoring in the firms use of their historical experience on forfeitures due to employees terminating employment prior to vesting to estimate the expected number of options that will vest. D. amortizing the fair value of the stock options on the date of the grant over the requisite service period, which is the expected period of benefit. E. the firm recomputes the fair value of the option at each succeeding balance sheet date to reflect new information about stock prices, volatility, dividend yield, or risk-free interest rates.

84. 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

85. The accounting for employee stock options involves amortizing the fair value of the stock options on the date of the grant over the requisite service period, which is   A. expected period of benefit. B. one year.C. two years.D. three years.E. five years.

86. 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

87. 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.

88. Which of the following is/are true? A. Stock rights give their holder the right to acquire shares of stock at a specified price. B. Firms grant stock rights to current shareholders. C. Shareholders may exercise the stock rights or sell them to others. D. The  stock rights usually trade in public markets. E. all of the above

89. Which of the following is/are true? A. Employees receive stock rights as a form of compensation B. Employees in general may not transfer or sell stock rights to othersC. 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 shareholders.

90. Which of the following is/are true? A. Employees receive stock rights as a form of compensation B. Employees in general may not transfer or sell stock rights to othersC. 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.