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:

Cash Dividends

A distribution of a portion of a company's earnings paid in cash to its shareholders, often on a quarterly basis.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments not considered cash equivalents.

Indirect Method

A cash flow statement preparation approach that adjusts net income for non-cash transactions and changes in working capital to calculate operating cash flow.

Comparative Balance Sheet

A financial statement that presents a company's assets, liabilities, and equity at two or more points in time, allowing for comparison and trend analysis.