Under the Fair Value Method, If an Executive Does Not

question 99

Multiple Choice

Under the fair value method, if an executive does not exercise a stock option and it is allowed to lapse, Common Stock Option Warrants is debited.What is credited?

• A)Additional Paid-In Capital from Expired Stock Options
• B)Compensation Expense
• C)Gain from Expired Stock Options
• D)Deferred Compensation

---

Definitions:

Current Ratio

A financial ratio that measures a company's ability to pay short-term obligations using its short-term assets.

Current Assets

Assets expected to be converted into cash, sold, or consumed within one year or in the normal operating cycle of the business, whichever is longer.

Current Liabilities

Financial obligations a company is due to pay within one year or within its normal operating cycle if longer.

FICA Withholdings

The portion of earnings withheld by employers for Social Security and Medicare taxes under the Federal Insurance Contributions Act.