Which Statement Best Describes the Accounting When a Company Cancels

question 39

Multiple Choice

Which statement best describes the accounting when a company cancels its own shares at an amount greater than their par value?

• A)Retained earnings will be debited at an amount equal to the par value of the shares.
• B)Retained earnings will be credited at an amount equal to the par value of the shares.
• C)Contributed surplus will be debited at an amount equal to the par value of the shares.
• D)Share capital will be debited at an amount equal to the par value of the shares.

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Definitions:

Poisson Distribution

A probability distribution that expresses the probability of a given number of events occurring in a fixed interval of time or space, assuming these events occur with a known constant rate and independently of the time since the last event.

Discrete Random Variable

A variable that takes on a countable number of distinct values, often used in probability theory and statistics.

Expected Value

The long-run average value of repetitions of the same experiment or process, representing the central tendency.

Laws of Expected Value

Mathematical rules that describe the properties of the expected value, highlighting how it behaves with respect to various operations like addition and multiplication.