Which Statement Is Correct About the "Two Transaction Method" for Treasury

question 36

Multiple Choice

Which statement is correct about the "two transaction method" for treasury shares resold for greater than their repurchase cost?

• A)This method decreases the contributed surplus when the repurchased shares are later resold.
• B)This method has the same effect on contributed surplus to that of the two transaction method.
• C)This method treats the reacquisition and subsequent sale as one cycle for accounting.
• D)This method increases contributed surplus at the time of repurchase.

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Definitions:

Specialization

The process in which individuals, firms, or countries focus on producing a narrow range of products or services, often to improve efficiency and productivity.

Division of Labor

The allocation of different tasks to different people or groups in an effort to increase efficiency and productivity.

Productivity

A measure of the efficiency with which goods and services are produced, often quantified as output per unit of input.

Economic Profits

The surplus after a firm subtracts its total costs from its total revenue, considering both explicit and implicit costs.