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:

Public Sale

A public sale is a process where goods, assets, or property are sold to the public through a bidding process or open market, often to the highest bidder.

Selling Expenses

Costs incurred by a company or individual directly related to the selling of goods or services, such as advertising, sales commissions, and retail space rental.

Junior Interests

Financial stakes in a company or property that rank below other debts and investments in terms of claims on assets or earnings.

Creditor's Debt

An obligation owed by a debtor to a creditor, typically involving the repayment of borrowed money with interest.