Assume Common Stock Is Issued to Employees as a Result

question 72

Multiple Choice

Assume common stock is issued to employees as a result of exercising stock warrants issued under a noncompensatory stock option plan.Which of the following accurately describes the effect on the company's income, paid-in capital, and retained earnings, respectively?

• A)decreased, increased, and decreased
• B)no effect, increased, and increased
• C)decreased, increased, and no effect
• D)no effect, increased, and no effect

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Definitions:

African American

A term referring to individuals in the United States with ancestry from Africa, particularly those whose family came through the transatlantic slave trade.

Hispanic Men

Refers to males of Latin American or Spanish origin or descent, living in any part of the world.

Incarcerated

Being confined in a prison or jail as a form of punishment.

Proportions

The relationship between quantities in terms of magnitude or size, often used to compare parts of a whole or elements in different wholes.