Accounting for Employee Compensation and Benefits

Intermediate Accounting Study Set 7

Quiz 19 :Accounting for Employee Compensation and Benefits

Showing 1 - 20 of 137
The first step in measuring compensation expense from granting employee stock options is to determine the fair value on the date of grant.
Free
True False

True

The fair value of stock options on the date of grant is usually readily determinable.
Free
True False

False

The value of stock options expected to be forfeited reduce compensation expense.
Free
True False

True

An employee will generally exercise stock options only when the current market price is above the exercise price of the option.
True False
The fixed price paid by an employee to acquire a share of stock under an option plan is the ________.
Multiple Choice
Which of the following items is generally not specified by a compensation arrangement involving stock options?
Multiple Choice
Which of the following statements regarding stock options is true?
Multiple Choice
Compensation expense associated with stock options is ________.
Multiple Choice
Among Fortune 500 companies, which of the following compensation plans is most common?
Multiple Choice
List and explain the terms that are required to account for the issuance of stock options.
Essay
An employee who receives an equity-classified award of stock options has the right to receive shares of stock.
True False
The initial journal entry to record an equity-classified award of stock options increases stockholders' equity on the balance sheet.
True False
The initial journal entry to record an equity-classified award serves as a disclosure for a stock option plan.
True False
A stock option plan is generally revalued whenever there is a change in the estimated percentage of options that will be forfeited.
True False
The compensation associated with equity-classified awards of stock options is ________.
Multiple Choice
If an unexpected forfeiture of options occurs under a stock option plan, the change in compensation is treated as ________.
Multiple Choice
On January 1, Year 1, Fields Corporation granted 500,000 stock options to certain executives. The options are exercisable no sooner than December 31, Year 3 and expire on January 1, Year 7. The vesting period is 3 years. Each option can be exercised to acquire one share of $10 par common stock for$15. An appropriate option-pricing model estimates the fair value of each option to be \$12 on the date of grant. What amount should Fields recognize as compensation expense for Year 1?