Allman,Inc

question 18

Multiple Choice

Allman,Inc. ,enters into a call option contract with Betts Investment Co.on January 2,2014.This contract gives Allman the option to purchase 1,000 shares of Upmann stock at $100 per share.The option expires on April 30,2014.Upmann shares are trading at $100 per share on January 2,2014,at which time Allman pays $200 for the call option.
-Using the information above,the call option would be recorded in the accounts of Allman as

• A) an asset.
• B) a liability.
• C) a gain.
• D) would not be recorded in the accounts (memorandum entry only).

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Definitions:

Optic Tract

Tract that extends from the optic chiasma to the lateral geniculate nucleus of the thalamus.

Melanin Pigment

A natural pigment found in most organisms, responsible for coloration in the skin, hair, and eyes.

Visual Acuity

A measure of the sharpness or clarity of vision, typically assessed by the ability to discern letters or numbers at a standardized distance.

Sphincter Pupillae

A ring of smooth muscle fibers around the edge of the pupil in the eye, which constricts the pupil in bright light.