Answer: a transfer between two balance sheet accounts.

## Explanation When restricted stock units (RSUs) vest: - The compensation expense has already been recognized over the vesting period - At vesting date, the company transfers the value from equity (specifically, from "additional paid-in capital" or similar equity accounts) to common stock - This is essentially a transfer between balance sheet accounts (within equity) - No new compensation expense is recorded at vesting - The cash flow statement is typically unaffected by this non-cash transaction **The correct answer is A: a transfer between two balance sheet accounts.** The accounting entry involves moving the value from one equity account to another, typically from additional paid-in capital to common stock.

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