Which Statement Best Describes the Accounting When a Company Cancels

question 73

Multiple Choice

Which statement best describes the accounting when a company cancels its own shares at an amount lower than the average share value?

• A)Contributed surplus and retained earnings will be credited.
• B)Contributed surplus and retained earnings will be debited.
• C)Contributed surplus will be credited,thereby increasing equity.
• D)Contributed surplus will be debited,thereby decreasing equity.

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Definitions:

Child Tax Credit

A tax credit available to taxpayers for each qualifying dependent child, aimed at reducing the taxpayer's liability.

AGI

Adjusted Gross Income (AGI) is a measure of income calculated from your gross income and allows for certain deductions, serving as a basis for calculating taxable income.

Dependent Child

A child who relies on their parent or guardian for more than half of their financial support and meets certain IRS criteria for tax purposes.

Foreign Tax Credit

A tax credit that cannot be refunded for income taxes paid to an external government due to withholdings from foreign income tax.