Under the Cost Method of Accounting for Treasury Stock Transactions

question 127

Multiple Choice

Under the cost method of accounting for treasury stock transactions, when the proceeds from a sale are greater than the cost, the excess over cost is treated as an)

• A) increase in Other Expenses from Treasury Stock Sales.
• B) increase in Additional Paid-in Capital from Treasury Stock.
• C) increase in a contra-shareholders' equity account.
• D) None of these choices.

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Definitions:

Angel Capitalism

The act of individual investors providing capital for start-up companies in exchange for ownership equity or convertible debt.

Venture Capitalism

Investing in early-stage companies with high growth potential in exchange for equity, or partial ownership.

Tender Offer

A public offer to buy shares from shareholders, usually at a premium over market price, as a way to gain control of the company.

Digital Accessories

Electronic ancillary equipment that supports and enhances the use of primary digital devices such as computers, smartphones, and tablets.