According to the CBCA, when a company purchases its own shares on the market
A) they are recorded with a debit to Repurchased Shares.
B) the amount paid is deducted from the share class to which they belong.
C) they must be cancelled.
D) the excess of purchase price over cost is a loss.

Question

Quizplus · Accepted Answer

When a company purchases its own shares on the market, they must be cancelled. This means that the shares will no longer exist and will no longer be outstanding. Options A and D are incorrect as the CBCA does not record repurchased shares with a debit or consider the excess of purchase price over cost a loss. Option B is also incorrect as the amount paid for repurchased shares is not deducted from the share class to which they belong.

According to the CBCA, When a Company Purchases Its Own