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:

Arousal Theory

A theory that suggests people are motivated to maintain an optimal level of arousal, neither too high nor too low.

Avoid Stress

Avoiding stress refers to strategies or actions taken to reduce or eliminate sources of tension and anxiety in one’s life.

Yerkes-Dodson Law

A psychological principle stating that there is an optimal level of arousal for performance on tasks—too little arousal can lead to underperformance, whereas too much can lead to errors.

Optimal Level

Refers to the most favorable or ideal state of something for its intended purpose or function.