Which statement is correct about the "single transaction method" for treasury shares?
A)This method increases the contributed surplus when the repurchased shares are later re-sold.
B)This method has the same effect on contributed surplus to that of the two transaction method.
C)This method treats the reacquisition and subsequent sale separately for accounting.
D)This method increases contributed surplus at the time of re-purchase.

Question

Quizplus · Accepted Answer

The single transaction method increases the contributed surplus when the repurchased shares are later re-sold, as it records the difference between the repurchase price and the selling price in the contributed surplus, assuming the selling price is higher.

Which Statement Is Correct About the "Single Transaction Method" for Treasury