What Is the Treasury Stock Method of Accounting for Stock

question 78

Essay

What is the treasury stock method of accounting for stock options, warrants, and rights?

Appreciate the role and benefits of the FASB Accounting Standards Codification.

Know which pronouncements are issued by FASB and their significance.

Understand the development and enforcement of accounting standards.

Distinguish between primary responsibilities of regulatory bodies in the U.S. financial reporting environment.

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Definitions:

Statute of Frauds

A legal requirement that certain types of contracts be executed in writing and signed by the party to be charged, in order to be enforceable.

UCC

Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, intended to standardize regulations across the states.

IRS Form

Official documents issued by the Internal Revenue Service for taxpayers to report financial information, file taxes, or claim deductions.

Delegation

A contracting party’s (a delegator’s) transfer of his or her duty to perform to a third party who is not part of the original contract (a delegatee).