When Treasury Stock Is Resold at a Price Below Cost

question 69

Multiple Choice

When treasury stock is resold at a price below cost:

• A) Additional Paid-in Capital is decreased.
• B) Additional Paid-in Capital is increased.
• C) A gain is reported on the income statement.
• D) A loss is reported on the income statement.

---

Definitions:

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision.

Confirmation Bias

The tendency to view events and people in ways that fit how we want and expect them to be.

Causal Attribution

The process by which individuals explain the causes of behavior and events, attributing them to internal dispositions or external situations.

Fundamental Attribution Error

The tendency for observers to overestimate personality or dispositional causes for someone else's behavior and underestimate situational influences.