Which of the Following Statements Does Not Accurately Reflect the Financial

question 101

Multiple Choice

Which of the following statements does not accurately reflect the financial accounting for compensatory stock option plans?

• A)Compensation expensed is allocated equally over the service (vesting)period.
• B)The compensation expense is not adjusted for changes in the market value of the stock options during the service (vesting)period.
• C)The paid-in capital stock options account is credited when compensation expense is recorded each year.
• D)Total owners' equity is increased by the par value of the common stock issued when the options are converteD.

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Definitions:

Job

A regular activity performed in exchange for payment, typically as part of one's occupation or profession.

Job Enlargement

A method of job design that increases the number of activities in a job to overcome the boredom of overspecialized work.

Integration

The act of combining or coordinating separate elements so they work together effectively.

Differentiation

The process of deciding how to divide the work in an organization.