Which One of the Following Statements Is Not True with Regard

question 25

Multiple Choice

Which one of the following statements is not true with regard to employee compensatory stock option plans?

• A)When a stock option is exercised under a compensatory stock option plan, the newly issued common stock is recorded at the exercise price and the value of the options at the grant date.
• B)When stock warrants are issued under a noncompensatory stock option plan, no formal journal entry is required to record the stock warrants.
• C)When a stock option is exercised under a compensatory stock option plan, the newly issued common stock is recorded at the exercise price and the previously recorded value of the warrants.
• D)For federal income tax purposes, any gains resulting from stock options earned by employees are taxed at ordinary income tax rates.

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Definitions:

Administrative Searches

Searches conducted by officials (e.g., health inspectors, safety regulators) as part of their regulatory duties without the need for a warrant.

Free-Exercise Clause

A clause in the First Amendment of the U.S. Constitution which states that government (state and federal) cannot make a law "prohibiting the free exercise" of religion; has been interpreted as including absolute freedom to believe and freedom to act, which may face state restriction.

First Amendment

A core provision of the United States Constitution that protects freedoms concerning religion, expression, assembly, and the right to petition.

Right to Privacy

the right to be free from intrusion or interference in one's personal life and affairs.