Gupta Corp

question 7

Multiple Choice

Gupta Corp. purchased its own shares on January 1, 2020 for $ 20,000 and debited Treasury Shares for the purchase price. The shares were subsequently sold for $ 12,000. The $ 8,000 difference between the cost and sales price should be recorded as a debit to

• A) Contributed Surplus to the extent that previous net "gains" from sales or retirements of the same class of shares are included therein; otherwise, to retained earnings.
• B) Contributed Surplus regardless of whether there have been previous net "gains" from sales or retirements of the same class of shares included therein.
• C) Retained Earnings.
• D) Loss from Sale of Treasury Shares.

Comprehend the difference between financial accounting and other areas of accounting.

Know the various forms of business ownership and their characteristics.

Understand the role and importance of internal and external auditors.

Learn about the concepts and principles underpinning financial reporting standards.

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