If Treasury Stock Is Sold at a Price Greater Than

question 3

Multiple Choice

If treasury stock is sold at a price greater than its reacquisition costs, the difference is:

• A)credited to Paid-in Capital from Treasury Stock Transactions.
• B)debited to Paid-in Capital from Treasury Stock Transactions.
• C)credited to Retained Earnings.
• D)debited to Retained Earnings.

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Definitions:

Securities

Financial instruments representing ownership (stocks), creditor relationships (bonds), or rights to ownership (options).

Primary Market Transaction

Occurs when new securities are sold for the first time to investors, directly impacting the issuing company's capital.

Issuing Corporation

The entity that offers securities for sale to investors, typically through the process of a public offering.

Secondary Market

A venue where investors buy and sell securities they already own, such as the stock market, separate from the primary market where securities are first issued.