Carrington, Inc

question 121

Multiple Choice

Carrington, Inc. recorded $97,000 in salary expense for January, 2015. Its beginning balance in salaries payable was $3,000 and its ending balance was $4,000. How much was paid in cash for salaries during January, 2015?

• A) $96,000
• B) $97,000
• C) $99,000
• D) $98,000

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Definitions:

ESOs

Employee Stock Options refer to the rights given to employees, included in their remuneration package, enabling them to buy shares of the company stock at a predetermined price.

Guarantee

A formal promise or assurance, typically in writing, that certain conditions will be fulfilled or that a product will meet a specified level of quality.

American Call Option

A type of options contract that gives the holder the right, but not the obligation, to buy a specific amount of a security at a specified price within a specified time period.

Underlying Asset

The specific security, commodity, or other financial instrument that a financial derivative, such as an option or futures contract, is based upon.