A Corporation Purchases 15,000 Shares of Its Own $20 Par

question 198

Multiple Choice

A corporation purchases 15,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

• A) Increase by $525,000.
• B) Decrease by $300,000.
• C) Decrease by $525,000.
• D) Decrease by $225,000.

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Definitions:

Possession

The act of owning or the state of being owned, denoting the control a person or entity has over an object, property, or asset.

Commission System

is a compensation method where employees or agents are paid based on the value of the sales or deals they make, intended to motivate higher performance.

Salespeople

Professionals who are responsible for selling a company's products or services to customers.

Sales Process

A sequence of steps or stages that a sales team follows to move a potential buyer from initial contact to closing a sale.