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Basic Question 6 of 14

When options are granted, SFAS 123 recommends to debit ______ and credit ______.

I. cash
II. paid-in capital - stock options
III. compensation expense
IV. common stock (par)
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User Contributed Comments 1

User Comment
quanttrader compensation expense || equity (pic / stock options)
*debit* *credit*
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes

Barnes

Learning Outcome Statements

explain issues associated with accounting for share-based compensation;

explain how accounting for stock grants and stock options affects financial statements, and the importance of companies' assumptions in valuing these grants and options.

CFA® 2025 Level II Curriculum, Volume 2, Module 11.