A Corporation Does Not Make a Journal Entry When

question 59

Multiple Choice

A corporation does not make a journal entry when:

• A)a shareholder exchanges the shares for cash with a different investor.
• B)shares are repurchased by the corporation at a price greater than their issue price.
• C)shares are repurchased by the corporation at a price less than their issue price.
• D)the corporation sells its treasury stock for cash to an investor.

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Definitions:

Taxable Income

Taxable income is the portion of an individual's or corporation's income used to determine how much tax will be owed to the government.

Tax Revenues

The money obtained by governments as a result of taxation.

Borrowing

The act of obtaining or receiving something on loan with the promise or understanding of returning it or its equivalent.

Social Security Benefits

Payments made to eligible individuals, typically retirees or disabled workers, provided through a government system funded by payroll taxes.