Which Statement Best Describes the Accounting When a Company Cancels

question 18

Multiple Choice

Which statement best describes the accounting when a company cancels its own shares at an amount higher than the average share value?

• A)Contributed surplus and retained earnings will be credited.
• B)Contributed surplus and retained earnings will be debited.
• C)Contributed surplus will be credited,thereby increasing equity.
• D)Contributed surplus will be debited,thereby decreasing equity.

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Definitions:

Nonexempt Record

A document or piece of information that is not protected from disclosure under law, thus is available for public access.

Amend

To make official changes to a document, law, or constitutional text.

Administrative Agency

A government body created to oversee and regulate specific aspects of the economy, implement policy, and enforce laws within its jurisdiction.

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The power of a court to review legislative and executive actions, such as a law or an official act of a government employee or agent, to determine whether they are constitutional.