Which statement about contributed surplus is correct?
A)Contributed surplus can only arise from the issuance of shares.
B)Contributed surplus can arise from the issuance of stock options.
C)Contributed surplus arising from share repurchase gives rise to a debit journal entry.
D)Contributed surplus arising from share issuance gives rise to a debit journal entry.

Question

Quizplus · Accepted Answer

Contributed surplus can arise from sources other than the issuance of shares, such as the issuance of stock options. Choice A is incorrect because contributed surplus can also arise from other sources. Choice C is incorrect because contributed surplus arising from share repurchase gives rise to a credit journal entry, not a debit journal entry. Choice D is incorrect because contributed surplus arising from share issuance gives rise to a credit journal entry, not a debit journal entry.

Which Statement About Contributed Surplus Is Correct