When Share Options Are Exercised by an Employee Under a Compensatory

question 115

Multiple Choice

When share options are exercised by an employee under a compensatory share option plan, the issuance of the common stock is recorded at the

• A) amount of cash received.
• B) amount of cash received less the previously recorded value of the options received.
• C) amount of cash received plus the previously recorded value of the options received.
• D) market price minus the share option price.

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Definitions:

Enterprise Resource Planning

Integrated management software systems that are used to collect, store, manage, and interpret data from various business activities, facilitating information sharing across the organization.

SCM

Supply Chain Management, the oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer.

Just-In-Time Production

A manufacturing methodology aimed at reducing inventory costs by producing goods only as they are needed in the production process or by the customer.

Inventory Replenishment

The process of adding stock to inventory to maintain desired levels and fulfill customer orders without delay.