Which of the Following Describes the Correct Treatment of Incentive

question 135

Multiple Choice

Which of the following describes the correct treatment of incentive stock options (ISOs) granted when ASC 718 (a codification of FAS 123R) applies?

• A) Financial accounting-no expense; tax-no deduction
• B) Financial accounting-no expense; tax-deduct bargain element at exercise
• C) Financial-expense value over vesting period; tax-no deduction
• D) Financial-expense value over vesting period; tax-deduct bargain element at exercise

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Definitions:

Raise

An increase in salary or wages, often awarded to employees based on performance or as a cost-of-living adjustment.

Bank Reconciliation

A process that explains the difference between the bank balance shown in an organization's bank statement, as provided by the bank, and the corresponding amount shown in the organization's own accounting records at a particular point in time.

Monthly Reconciliation

Monthly Reconciliation is the process of verifying and adjusting the balance of an account to match the corresponding bank or financial statement on a monthly basis.

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those presented on a bank statement.