What Is the Primary Difference Between an American and European

question 65

Multiple Choice

What is the primary difference between an American and European option?

• A)The value at which the option can be exercised.
• B)The number of options that can be exercised.
• C)The time period when the option can be exercised.
• D)The manner options are bought or sold.

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Definitions:

Expense Recognition Principle

Accounting principle that dictates expenses should be recognized in the period in which they are incurred to generate revenues.

Accounting Period

This is a specific duration of time for which financial statements are prepared to understand and evaluate a company's financial performance.

Earned

Refers to income or revenue that a company has generated from its operations or business activities.

Adjustments

Records documented in the financial accounts at the end of a fiscal period to distribute revenues and expenses to the timeframe in which they were truly incurred.