When a Corporation Reacquires Its Own Shares of Stock

question 11

Multiple Choice

When a corporation reacquires its own shares of stock,

• A)the Treasury Stock account is debited for the par value of the shares reacquired.
• B)the Treasury Stock account is debited for the original issue price of the shares.
• C)the Treasury Stock account is debited for the price paid to reacquire the shares.
• D)the Treasury Stock account is credited for the current market value of the shares.

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Definitions:

U.S. Business

Business enterprises operating within the United States, covering a wide range of industries and contributing to the economic activity of the country.

Patent Trolls

Entities that acquire patents not to produce goods or services but to profit from suing or threatening to sue for patent infringement.

Intellectual Property

Legal rights that result from intellectual activity in the industrial, scientific, literary, and artistic fields.

Royalties

Payments made by one party to another for the right to use intellectual property, such as music, books, or patents, on an ongoing basis.