- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 8. Topics in Long-Term Liabilities and Equity
- Subject 5. Financial Reporting for Post-Employment and Share-Based Compensation Plans
CFA Practice Question
Which options are exercised, according to SFAS 123, ______ should be debited and ______ should be credited.
II. paid-in capital - stock options
III. compensation expense
IV. common stock (par)
V. paid in capital in excess of par
I. cash
II. paid-in capital - stock options
III. compensation expense
IV. common stock (par)
V. paid in capital in excess of par
Correct Answer: debit I and II, and credit IV and V.
User Contributed Comments 3
| User | Comment |
|---|---|
| bmeisner | How does this agree with the question earlier about debiting compensation expense? |
| ssradja | you debit it when granted, not exercised as this question asks. |
| quanttrader | when granted you credit paid-in capital (stock options), when exercised you debit paid-in capital and credit paid in capital in excess of par |