MCQ for CA Intermediate Adv. Accounts - Chapter 3 - ACCOUNTING FOR EMPLOYEE STOCK OPTION PLANS

Sample Multiple Choice Questions (MCQ's) for CA Intermediate - Paper 5 - ADVANCED ACCOUNTING - Chapter 3: ACCOUNTING FOR EMPLOYEE STOCK OPTION PLANS - For Practice relevant for May/November 23 Examinations

 

Q1.  For accounting purposes, employee stock option plans are classified as

  1. Equity settled and cash settled
  2. Liability settled and cash settled
  3. Equity settled, cash settled and employees stock option plans with cash alternatives.

Answer: 3

Q2.  The difference between the fair value of the shares to which the counterparty has the (conditional or unconditional) right to subscribe or which it has the right to receive, and the price (if any) the counterparty is (or will be) required to pay for those shares is

  1. Exercise Price
  2. Intrinsic Value
  3. Fair Value

Answer: 2

Q3. Which amount would be recognized for employee stock option plans? 

  1. Fair value of services received 
  2. Amount as per agreement
  3. Fair value of equity instruments issued

Answer: 3

Q4. In line with the Guidance Note on Accounting for Share based Payments, an enterprise should recognize an amount for the services received from the employees

  1. during the vesting period based on the best available estimate of the number of stock options expected to vest. 
  2. Immediately
  3. during the vesting period proportionately

Answer: 1

Q5. Which method is recommended for valuation of employee stock option plans by the Guidance Note on Accounting for Share Based Payments?  

  1. Intrinsic Value
  2. Fair value
  3. Both value (a) and (b)

Answer: 2

 

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