Which of the Following Is a Disadvantage Associated with Stock

question 74

Multiple Choice

Which of the following is a disadvantage associated with stock options?

• A) They may encourage the CEO to falsely cook the company's financials.
• B) They align incentives with shareholder interests.
• C) They encourage executives to create stock value.
• D) They motivate CEOs to act like owners.

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Definitions:

Cost of Purchases

The total price paid for goods acquired for resale, including transportation and handling expenses.

Periodic Inventory System

An accounting method where inventory is physically counted and valued at the end of a specific period.

Physical Count

An inventory auditing process where the actual quantity of goods on hand is counted and compared with accounting records.

External Auditors

Independent auditors who examine the financial statements of an entity to ensure accuracy and compliance with accounting standards.