Which Statement Is Correct About the "Two Transaction Method" for Treasury

question 37

Multiple Choice

Which statement is correct about the "two transaction method" for treasury shares?

• A)This method decreases the contributed surplus when the repurchased shares are later re-sold.
• B)This method has the same effect on contributed surplus to that of the two transaction method.
• C)This method treats the reacquisition and subsequent sale as once cycle for accounting.
• D)This method increases contributed surplus at the time of re-purchase.

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Definitions:

Produced Units

The quantity of finished goods that a manufacturing or production process has completed over a specific period.

Product Costs

The total costs incurred to create a product, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Period costs are expenses that are not directly tied to production and are expensed in the period they are incurred, such as selling, general, and administrative expenses.

Financial Reporting

The process of disclosing financial results and related information to stakeholders and the public through financial statements and other declarations.