Which of the Following Was True About Employee Stock Options

question 6

Multiple Choice

Which of the following was true about employee stock options between 1996 and 2004?

• A) The options never had any affect on a company's financial statements
• B) The value of options which were at-the-money when issued had to be expensed on the income statement
• C) The value of options which were at-the-money when issued had to be reported in the notes to the financial statements
• D) Options which were at-the-money when issued did not affect a company's financial statements

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Definitions:

Work Opportunity Reconciliation Act

Legislation in the United States that aims to encourage employers to hire less qualified job seekers, including long-term welfare recipients, by offering federal tax credits.

Welfare Benefits

Financial or material aid provided by the government to individuals or groups in need.

Medicare

A federal health insurance program in the United States primarily for people aged 65 and over, as well as for some younger people with disabilities.

Medicaid

A social health care program for families and individuals with low income and resources in the United States.