Mar 28, 2019 · How to Account for Stock Based Compensation. Stock compensation is a way for companies to pay employees in shares of stock or stock options. Stock options are the most common type of stock compensation and allow an employee to purchase the...

Non cash expenses appear on an income statement because accounting principles require them to be recorded despite not actually being paid for with cash. The most common example of a non cash expense is depreciation, where the cost of an asset is spread out over time