Under the cost method of accounting for treasury stock transactions, when the proceeds from a sale are greater than the cost, the excess over cost is treated as a(n)
A)increase in Other Expenses from Treasury Stock Sales
B)increase in Additional Paid-in Capital from Treasury Stock
C)increase in a contra-stockholders' equity account
D)increase in Additional Paid-in Capital on Common Stock
E)none of these

Question

Quizplus · Accepted Answer

Under the cost method, when treasury stock is sold for more than its cost, the excess is credited to Additional Paid-in Capital from Treasury Stock, reflecting the additional capital contributed by shareholders over the cost of the treasury shares.

Under the Cost Method of Accounting for Treasury Stock Transactions