A Company May Reacquire Its Own Shares for All of the Following

question 46

Multiple Choice

A company may reacquire its own shares for all of the following reasons except to

• A)enhance market value.
• B)reduce market value.
• C)increase earnings per share.
• D)have additional shares available for use.

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Definitions:

Comprehensive Income

This is a measure of all changes in equity of a company that result from recognized transactions and other economic events of the period other than those resulting from investments by and distributions to owners.

Accrual-Based Sales Revenue

Revenue recognized when earned, regardless of when the payment is received, following the accrual basis of accounting.

Ending Inventory

The worth of merchandise ready for sale when an accounting period concludes, determined by adding beginning inventory and purchases, then subtracting the cost of goods sold.

Retained Earnings

The cumulative amount of profits kept in a company after dividends are paid, used for reinvestment in the business or to pay down debt.