In Some Cases, Particularly When the Reissue of Treasury Stock

question 70

Multiple Choice

In some cases, particularly when the reissue of treasury stock results from the exercise of employee stock options, the amount paid by the firm to reacquire the treasury shares exceeds the subsequent reissue price.If the firm applied the constructive retirement method, it is unlikely that the reissue price would be so low as to require a debit to _____.

• A)Additional Paid-In Capital account so long as that account has a sufficiently large credit balance.To the extent the required debit exceeds the credit balance in the Additional Paid-In Capital account, the firm reduces that account to zero and debits the excess to Retained Earnings.
• B)Additional Paid-In Capital.
• C)Retained Earnings.
• D)Net Income.
• E)Accumulated Other Comprehensive Income.

---

Definitions:

Corpus Callosum

A large bundle of nerve fibers that connects the left and right hemispheres of the brain, facilitating interhemispheric communication.

Cerebellum

In vertebrates, a brain segment positioned at the skull's back, in charge of orchestrating and controlling movements of muscles.

Emotion Regulation

The process by which individuals influence their emotions, when they have them, and how they experience and express them.

Limbic System

A complex system of nerves and networks in the brain, involved in instinct and mood. It controls the basic emotions (fear, pleasure, anger) and drives (hunger, sex, dominance, care of offspring).