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:

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Raw Materials

The basic materials from which products are manufactured or made.

Accounts Payable

The amounts a company owes because it purchased goods or services on credit from a supplier or vendor.

Required Production

The quantity of products that must be manufactured or produced to meet customer demand.