The Main Issue in the Debate Over Accounting for Employee

question 56

Multiple Choice

The main issue in the debate over accounting for employee stock options was:

• A) Which employees should receive options.
• B) The amount of compensation expense that a company should recognize.
• C) How many options should be granted to key executives.
• D) The tax consequences of employee stock options.

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Definitions:

Entrepreneur

An individual who creates, organizes, and operates a business or businesses, taking on greater than normal financial risks in order to do so.

Present Value

The present value of a future amount of money or series of cash flows, taking into account a particular rate of return.

Rate of Interest

The percentage of a sum of borrowed money that is paid by the borrower to the lender for the use of that money for a certain period.

Frank Knight

was an influential American economist known for his work on risk, uncertainty, and the role of the entrepreneur in economic theory.