Listed Below Are Five Terms Followed by a List of Phrases

question 197

Multiple Choice

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the most correct term.
-Stock option

• A)Expensed as compensation in the period earned
• B)Benefit period over which stock option compensation expense is spread.
• C)Paid-in capital effectively renamed under the fair value approach
• D)Shares given for achieving financial goals
• E)A right to buy shares of stock in the future.

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Definitions:

Bad Debt Expense

An expense reported on the income statement, reflecting the cost of credit sales that are not expected to be collected.

Terms 2/10 N/30

A common payment term in business indicating that a buyer can take a 2% discount on the invoice price if payment is made within 10 days; otherwise, the full invoice price is due in 30 days.

Merchandise Returns

Goods returned by the buyer to the seller, often due to defects, dissatisfaction, or other reasons, leading to a reversal of the sale.

Cash Realizable Value

The net amount of cash expected to be received from receivables, after adjusting for any allowances for doubtful accounts.