Which of the following statements regarding nonqualified stock options (NQOs) is false?
A. All stock option-related book-tax differences are temporary.
B. If the value of the options that accrue is greater than the bargain element of options exercised, the book-tax difference for that year is unfavorable.
C. No expense recognition is required for NQOs for financial accounting purposes.
D. Book-tax differences associated with NQOs may be either permanent or temporary.
Answer: C
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