Which Statement Best Describes the Accounting When a Company Cancels

question 39

Multiple Choice

Which statement best describes the accounting when a company cancels its own shares at an amount greater than their par value?

• A)Retained earnings will be debited at an amount equal to the par value of the shares.
• B)Retained earnings will be credited at an amount equal to the par value of the shares.
• C)Contributed surplus will be debited at an amount equal to the par value of the shares.
• D)Share capital will be debited at an amount equal to the par value of the shares.

---

Definitions:

Signal Wiring

The physical connections between electronic devices through which electrical signals are sent and received, essential for the communication within control systems.

Grounding System

An electrical connection to the ground which is used to protect against electric shock and ensure operational safety.

High-Impedance Path

A circuit path that has a relatively high resistance to current flow, often affecting signal quality or energy transfer efficiency.