Assume That a Company Issued 10,000 Shares for $30/share

question 51

Multiple Choice

Assume that a company issued 10,000 shares for $30/share.What entry would be required to record the repurchase and cancellation of 1,000 shares at $28/share?

• A)Debit to common shares for $28,000
• B)Debit to common shares for $30,000
• C)Credit to contributed surplus for $29,000
• D)Credit to contributed surplus for $1,000

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Definitions:

Allowance Account

A contra-asset account used to record adjustments to accounts receivable, reflecting the amounts expected not to be collected.

Uncollectible

Refers to accounts receivable that are considered to be uncollectable from debtors due to their inability to pay.

Credited

A term used in accounting to denote an increase in liabilities or equity accounts, or a decrease in assets or expense accounts.

Financial Assets

Assets that derive value from a contractual claim, such as cash, stocks, bonds, and bank deposits.