Which of the Following Statements Regarding Nonqualified Stock Options (NQOs)

question 51

Multiple Choice

Which of the following statements regarding nonqualified stock options (NQOs) isfalse?

• A) If ASC 718 does not apply, all stock option-related book-tax differences are temporary.
• B) Before ASC 718 applied, no expense recognition was required for NQOs for financial accounting purposes.
• C) In a given year when ASC 718 applies, if the value of the options that accrue is greater than the bargain element of options exercised, the book-tax difference for that year is unfavorable.
• D) If ASC 718 applies, book-tax differences associated with NQOs may be either permanent or temporary.

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Definitions:

Secondary Gains

Benefits indirectly obtained from being sick, such as attention from others or avoidance of responsibilities.

Antecedent

An event, condition, or phenomenon that occurs before and potentially causes or influences an outcome.

Consequences

The outcomes or effects that naturally follow from particular actions or behaviors.

Direct Interviewing

A method of collecting information through face-to-face conversation, where questions are asked in a straightforward manner.