When Shares Are Reacquired at a Cost Less Than the Average

question 113

Multiple Choice

When shares are reacquired at a cost less than the average per share value, the difference is credited to

• A) the appropriate share capital account.
• B) Gain on Reacquisition of Shares.
• C) Retained Earnings.
• D) Contributed Surplus.

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Definitions:

Certain Income

Certain income refers to a guaranteed or fixed amount of earnings that an individual or entity can expect to receive over a period.

Uncertain Income

Uncertain income refers to earnings that fluctuate and are not guaranteed, often associated with irregular work or investment returns.

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Marginal Utility

The added gratification or usefulness experienced from the consumption of an additional unit of a good or service.