Which statement best describes the accounting when a company cancels its own shares at an amount greater than their par value?
A)Retained earnings will be debited at an amount equal to the par value of the shares.
B)Retained earnings will be credited at an amount equal to the par value of the shares.
C)Contributed surplus will be debited at an amount equal to the par value of the shares.
D)Share capital will be debited at an amount equal to the par value of the shares.

Question

Quizplus · Accepted Answer

When a company cancels its own shares at an amount greater than their par value, the share capital account is debited for the par value of the shares to reduce the share capital by the number of shares cancelled.

Which Statement Best Describes the Accounting When a Company Cancels