How Should a Gain from the Sale of Treasury Stock

question 79

Multiple Choice

How should a gain from the sale of treasury stock be reflected when using the single transaction method of recording treasury stock transactions?

• A)As an increase in the amount shown for common stock
• B)As ordinary earnings shown on the income statement
• C)As an extraordinary item shown on the income statement
• D)As contributed capital from treasury stock transactions

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Definitions:

Two-factor Theory

A psychological theory proposed by Herzberg that suggests job satisfaction and dissatisfaction arise from two different sets of factors: motivation and hygiene factors.

Employee Motivation

The amount of enthusiasm, dedication, and innovation employees contribute to their roles in a corporation.

Herzberg

Refers to the two-factor theory by Frederick Herzberg, which posits that certain factors in the workplace result in job satisfaction, while others lead to dissatisfaction, hence differentiating between 'motivators' and 'hygiene factors'.

Taylor's Scientific

Refers to Taylor's Scientific Management Theory, emphasizing efficiency and productivity through the analysis and optimization of workflow.