Which of the Following Statements Regarding Incentive Stock Options (ISOs)is

question 125

Multiple Choice

Which of the following statements regarding incentive stock options (ISOs) is false?

• A)ISOs that vest create solely permanent book-tax differences.
• B)For ISOs,book-tax differences are always unfavorable.
• C)For books,the initial estimated value of the ISOs is expensed pro-rata over the vesting period.
• D)Book-tax differences associated with ISOs may be either permanent or temporary.

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Definitions:

Perpetual Inventory System

An accounting method that continuously updates inventory records for every purchase and sale.

Credit Memo

A document issued by a seller to a buyer, reducing the amount that the buyer owes due to a return or refund.

Credit for Returns

A reduction in sales revenue that occurs when customers return previously purchased products.

Discount Period

The timeframe during which a discount is available or the period between the receipt of a bill and its payment due date when a discount may be taken.