Which Statement Best Describes the Accounting When a Company Cancels

question 39

Multiple Choice

Which statement best describes the accounting when a company cancels its own shares at an amount greater than their par value?

• A)Retained earnings will be debited at an amount equal to the par value of the shares.
• B)Retained earnings will be credited at an amount equal to the par value of the shares.
• C)Contributed surplus will be debited at an amount equal to the par value of the shares.
• D)Share capital will be debited at an amount equal to the par value of the shares.