Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Total compensation associated with restricted stock awards typically is equal to the shares':

book value at the end of the restriction period

market value on the exercise date

par value on the vesting date

fair value on the grant date

Previous problemNext problem

Verified step by step guidance

Understand the concept of restricted stock awards: Restricted stock awards are shares granted to employees as part of their compensation, but these shares come with restrictions, such as a vesting period during which the employee must meet certain conditions to own the shares outright.

Learn about fair value: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For restricted stock awards, the fair value is determined on the grant date, which is the date the award is given to the employee.

Clarify the grant date: The grant date is the date on which the restricted stock award is issued to the employee. On this date, the fair value of the shares is calculated based on the market value of the stock.

Understand why fair value on the grant date is used: Accounting standards, such as those outlined by the Financial Accounting Standards Board (FASB), require that the total compensation cost associated with restricted stock awards be based on the fair value of the shares at the grant date. This ensures consistency and transparency in financial reporting.

Apply this knowledge to the problem: The total compensation associated with restricted stock awards is equal to the fair value of the shares on the grant date, not the book value at the end of the restriction period, market value on the exercise date, or par value on the vesting date.