When a Corporation Buys a Portion of Its Own Common

question 32

Multiple Choice

When a corporation buys a portion of its own common shares, the recording must conform to the:

• A) matching principle.
• B) cost principle.
• C) revenue recognition principle.
• D) accrual principle.

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Definitions:

Business Organization

A structured commercial or entrepreneurial entity set up according to a particular legal framework to conduct business and provide goods or services.

Perfect Substitutes

Products or offerings that serve as substitutes for one another without diminishing the consumer's satisfaction.

Indifference Curves

Graphical representations in economics showing different combinations of two goods that provide equal utility or satisfaction to a consumer.

Perfect Complements

Goods that are used together in fixed proportions to satisfy a particular need or desire.