17. S tock warrants outstanding should be classified as: (a) Liabilities. (b) (c) Reductions of contributed capital in excess of par value. Assets. (d) None of the above. on which to measure the compensation element in a stock option employee ordinarily is the date on which the employee: 18. The date granted to a corporate (a) May first exercise the option. (b) Is granted the option. (c) (d) Exercises the option. Has performed all conditions required to exercise the option. 19. Which of the following is not a characteristic of a noncompensatory stoclk purchase plan? (a) It is open to almost all full time employees. (b) The plan offers no substantive option feature. (c) The discount from market price is small. (d) All of the above are characteristics of noncompensatory stock purchase plans. 24. In the diluted earnings per share (EPS) computation, the treasury stock method is used for options and warants to reflect assumed reacquistion of common stock at the average market price during the period. If the exercise price of the options or warrants exceeds the average market price of the during the period for which the would: stock (a) (b) Fairly present diluted earnings per share on a prospective basis. Fairly present the maximum potential dilution of diluted earnings per share on a prospective basis. Be antidilutive. Reflect the excess of the number of shares assumed issued over the number of shares assumed reacquired as the potential dilution of earnings per share. (c) (d) Assume there are two dilutive convertible securities. The one that should be used first to recalculate earnings per share is the security with the: (a) Greatest earnings per share effect (b) Greatest earnings effect. (c) Smallest earnings per share effect (d) Smallest earnings effect. 25