When Shares Are Reacquired at a Cost Less Than the Average

question 113

Multiple Choice

When shares are reacquired at a cost less than the average per share value, the difference is credited to

• A) the appropriate share capital account.
• B) Gain on Reacquisition of Shares.
• C) Retained Earnings.
• D) Contributed Surplus.

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Definitions:

Demand Schedule

A table that shows the relationship between the price of a good and the quantity demanded at each price level.

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded by consumers.

Monopolistically Competitive

Pertaining to a market scenario where firms engage in monopolistic competition, each firm has some control over its price because its product is different from those of its competitors.

Elasticity

A measure of the sensitivity of one variable to changes in another, commonly used to assess changes in demand or supply in response to changes in prices or income.