What Is the Most Important Accounting Objective for Equity Classified

question 44

Multiple Choice

What is the most important accounting objective for equity classified awards?

• A)Measuring their fair value for balance sheet purposes.
• B)Determining the correct amount of compensation expense during the service period.
• C)Disclosing increases and decreases in the value of the stock options held at the end of each accounting period.
• D)Determining the change in the number of stock options that will eventually be exercised.

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Definitions:

Debit Balance

Refers to the balance remaining in a financial account where debts or expenses exceed the credits or revenues.

Footing

Footing is the process of summing up the numerical values in an accounting column to determine the total, typically as a preliminary step in the preparation of financial statements.

Normal Debit Balance

The expected balance type of an account that is increased by a debit, typical for assets, expenses, and losses.

Withdrawals

Money taken out from a bank account, or the act of taking out funds from a business by its owners for personal use.