When Accounting for a Fixed Compensatory Share Option Plan, a Company

question 76

Multiple Choice

When accounting for a fixed compensatory share option plan, a company must make which of the following on the date of grant?

• A) journal entry recognizing the common stock issued
• B) journal entry recognizing the compensation expense
• C) memorandum entry explaining the terms of the compensatory share option plan
• D) memorandum entry of the expected annual compensation expense amount

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Definitions:

Level Material Use

A strategy in production planning that aims for a constant rate of material use, minimizing fluctuations in inventory levels.

Repetitive Manufacturing

A production method where the same products or components are produced in a continuous flow or on a repetitive basis.

Intermittent Process

Refers to a production system where the flow of materials is irregular, handling a variety of products or services.

First Come

A principle where services or resources are allocated to recipients in the order of their arrival or request.