Which of the Following Is Not a Purpose of Equity-Based

question 78

Multiple Choice

Which of the following is not a purpose of equity-based compensation?

• A) Provide both risk and incentives to employees.
• B) Motivate employees by aligning employee and employer incentives.
• C) Avoid compensation limits for certain publicly traded company executives.
• D) Provides a low or no cost form of compensation.

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Definitions:

Revenue Recognition

The accounting principle that outlines the specific conditions under which revenue is recognized or recorded.

Initial Direct Costs

Upfront expenditures that are directly associated with securing a contract or lease, such as legal and brokerage fees.

Service Costs

The expenses recognized in the period in which employees render services to obtain future benefits under a defined benefit plan.

Deferred

This refers to items or transactions that are postponed or delayed to a future date for accounting purposes.