When a Company Reacquires Its Own Stock, the Entry to Record

question 59

Multiple Choice

When a company reacquires its own stock, the entry to record the reacquisition could include an entry to Additional Paid-in Capital from Treasury Stock under which of the following methods? $\begin{array}{lll}&\text { Cost Method }&\text { Par Value Method }\\\text { I. } & \text { Yes } & \text { Yes } \\\text { II. } & \text { Yes } & \text { No } \\\text { III. } & \text { No } & \text { No } \\\text { IV } & \text { No } & \text { Yes }\end{array}$

• A)I
• B)II
• C)III
• D)IV

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Definitions:

Industry Supply Curve

A graphical representation that shows the relationship between the price of a good and the total output of that good by all firms in the industry.

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good varies as production volume changes.

Raw Materials

The basic materials from which products are manufactured or made.

Average Total Cost

The total cost of production divided by the quantity produced, encompassing both fixed and variable costs to provide a per-unit cost basis.