If Treasury Stock Is Sold for Less Than Its Cost

question 33

Multiple Choice

If treasury stock is sold for less than its cost, and there were no previous treasury stock sales, the difference between the sales price and cost is debited to

• A) Paid-In Capital, Treasury Stock
• B) Common Stock
• C) Retained Earnings
• D) Paid-In Capital in Excess of Par

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Definitions:

Financing Statement

A document filed to give public notice of a secured transaction, typically in relation to personal property, establishing a priority interest in the property for the creditor.

Constructive Notice

Notice presumed by law that an individual should have known, often through the public recording of documents, even if they were unaware.

Perfect Security Interest

An interest that is legally protected and established in a way that no other claimant can have a higher claim upon the collateral in question.

Purchase Money

Funds that are used specifically for the acquisition of assets, often related to real estate transactions or personal property.