Firms Use the Par Value Method When Management and the Governing

question 81

True/False

Firms use the par value method when management and the governing board do not intend to reissue shares within a reasonable amount of time or when jurisdiction-specific corporation laws define reacquired shares as retired shares.

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Definitions:

Temporary

Not permanent; lasting for a limited period of time or intended for short-term use.

Employer's Payroll Tax

Taxes that employers are required to pay on behalf of their employees, which may include contributions to social security, Medicare, and unemployment taxes.

Permanent

A term used in accounting to describe accounts that are not closed at the end of the accounting period, such as assets, liabilities, and equity accounts.