Under the Cost Method of Accounting for Treasury Stock Transactions

question 52

Multiple Choice

Under the cost method of accounting for treasury stock transactions, when the proceeds from a sale are greater than the cost, the excess over cost is treated as a(n)

• A)increase in Other Expenses from Treasury Stock Sales
• B)increase in Additional Paid-in Capital from Treasury Stock
• C)increase in a contra-stockholders' equity account
• D)increase in Additional Paid-in Capital on Common Stock
• E)none of these

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Definitions:

Secondary Group

A social group characterized by formal, impersonal, and temporary relationships, often task-oriented and focused on a specific goal or activity.

Social Interaction

Involves people communicating face-to-face and acting and reacting in relation to other people. It is structured around norms, role, and statuses.

Authority Structure

The way in which power and authority are distributed and exercised within an organization or society.

Artificial

Something made or produced by human beings rather than occurring naturally, typically as a copy of something natural.