Which Statement About Contributed Surplus Is Correct

question 24

Multiple Choice

Which statement about contributed surplus is correct?

• A)Contributed surplus can only arise from the issuance of shares.
• B)Contributed surplus can arise from the issuance of stock options.
• C)Contributed surplus arising from share repurchase gives rise to a debit journal entry.
• D)Contributed surplus arising from share issuance gives rise to a debit journal entry.

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Definitions:

Absorbed Corporations

companies that have been merged into or taken over by another corporation, losing their separate legal identity.

Right of Recovery

The legal right to seek compensation or restitution for a loss, damage, or injury suffered.

Surviving Corporation

In a merger or consolidation, the corporation that continues to exist, absorbing the business of the other entity.

Chose in Action

represents a personal right to property not yet in the holder's possession but recoverable by legal action.