Which of the Following Arguments Was Not Used to Support

question 116

Multiple Choice

Which of the following arguments was not used to support the continuation of the accounting for stock-based compensation plans as allowed under APB Opinion No.25?

• A)Stock options do not involve a cash flow,therefore the recording of an expense would violate appropriate income measurement.
• B)The Black-Scholes method of valuing stock options has not been widely accepted and is arbitrary.
• C)The fair value approach could jeopardize compliance with contract terms and conditions.
• D)The fair value approach would increase expenses and lower net income which would result in lower stock prices.

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Definitions:

Inborn Characteristics

Traits or features that an individual possesses from birth, determined by genetic inheritance.

Biology Alone

A phrase suggesting that biological factors solely determine various aspects of living organisms, ignoring environmental, psychological, or social influences.

Percentage

A mathematical term indicating a part or fraction of a hundred, used to describe ratios or proportions in comparison to a whole.

Intelligence Characteristics

Traits or features that pertain to a person's cognitive capabilities, including problem-solving, reasoning, and understanding complex ideas.