If the Entry to Record the Retirement of Treasury Stock

question 32

Multiple Choice

If the entry to record the retirement of treasury stock contains a credit to a Paid-in Capital, Retirement of Stock account, it is apparent that the

• A) cost of the treasury shares was less than par value.
• B) cost of the treasury shares was greater than the original issuance price of the shares.
• C) cost of the treasury shares was less than the original issuance price of the shares.
• D) original issuance price of the shares was less than par value.

---

Definitions:

F.O.B Destination

A shipping term indicating that the seller pays for transportation of the goods to the destination and retains ownership until delivery is completed.

Perpetual Inventory Method

An accounting method that records goods and materials inventory after every addition or subtraction, providing a continuous record of inventory levels.

General Journal Entries

Account records in the general journal that detail financial transactions and their impact on accounts.

Perpetual Inventory Method

A continuous system of recording inventory transactions immediately as they occur, providing an up-to-date record of stock levels.