Assume Common Stock Is Issued to Employees as a Result

question 141

Multiple Choice

Assume common stock is issued to employees as a result of exercising stock purchase rights issued under a noncompensatory share purchase 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:

Machover

Refers to the Machover Draw-A-Person Test, a projective psychological test used to evaluate personality and emotional functioning.

Projective Personality Assessments

Psychological tests that use ambiguous stimuli to elicit responses that reveal aspects of an individual's personality.

Unstructured

Describes a format or situation lacking a predefined framework or organization, often allowing for more flexibility and spontaneity.

Sentence Completion Test

A psychological assessment tool where individuals complete sentences in an open-ended manner, used to explore attitudes, beliefs, motivations, or personality traits.