Which Statement Best Describes the Accounting When a Company Cancels

question 73

Multiple Choice

Which statement best describes the accounting when a company cancels its own shares at an amount lower 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.