When All of the Preferred Shares Are Purchased and Formally

question 153

Multiple Choice

When all of the preferred shares are purchased and formally retired by the issuing corporation for less than its original issue price,accounting for the retirement increases:

• A) Retained earnings.
• B) Contributed capital in excess of par, common stock.
• C) Net income for the period.
• D) Contributed capital from retirement of preferred shares.

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Definitions:

Political Control

The influence or authority exerted by a government or political group over its citizens, economic system, or societal structures.

Inflation Rates

The percentage increase in the price level of goods and services over a period, reducing purchasing power.

Excess Reserves

Bank reserves that exceed the required minimum amount that financial institutions must hold in reserve against deposit liabilities.

Required Reserves

The minimum amount of reserves that a bank must hold as dictated by central banking regulations, typically a percentage of deposits.