The Most Important Accounting Objective for Executive Stock Options Is

question 48

Multiple Choice

The most important accounting objective for executive stock options is:

• A)Measuring and reporting the amount of compensation expense during the service period.
• B)Measuring their fair value for balance sheet purposes.
• C)To disclose increases or decreases in the stock options held at the end of each accounting period.
• D)None of these is correct.

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Definitions:

Bullwhip Measure

A quantification of the bullwhip effect, which illustrates how variations in demand can be amplified as one moves up the supply chain.

Standard Deviation

A statistical measure of the dispersion or variability in a data set, indicating how much individual data points deviate from the mean or average.

Cash for Clunkers

A government program intended to stimulate the economy and encourage the purchase of new vehicles by offering financial incentives for trading in older, less-efficient cars.

Bullwhip Effect

A phenomenon in supply chains where small variations in demand at the retail level cause progressively larger fluctuations in demand at the wholesale, distributor, and manufacturer levels.