Clean surplus accounting for most common stock transactions holds for shares accounted for at market value.An exception to this is:
A) issuance of common equity shares for employee stock options exercises.
B) repurchase of common shares.
C) issuance of common shares to new shareholders in public exchanges.
D) None of these.

Question

Quizplus · Accepted Answer

When common equity shares are issued for employee stock options exercises, the issuance price is typically lower than the market value of the shares. Therefore, this transaction does not hold for clean surplus accounting.

Clean Surplus Accounting for Most Common Stock Transactions Holds for Shares