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Which of the Following Statements Is TRUE

question 69

Multiple Choice

Which of the following statements is TRUE?


Definitions:

Treasury Shares

Stocks that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Contributed Surplus

An account on the shareholders' equity section of the balance sheet that represents the excess amount investors paid over the par value of the shares.

Retained Earnings

Accumulated net incomes of a company not paid out as dividends but retained for reinvestment in the business or to pay off debts.

Shareholders' Equity

This represents owners' claims after all liabilities have been deducted from the total assets of a company.

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