The reacquisition of common shares for a price lower than the average cost will result in a credit to "gain on the purchase of common shares."

Question

Quizplus · Accepted Answer

The reacquisition of common shares at a price lower than their average cost does not result in a "gain on the purchase of common shares." Instead, it affects the treasury stock and additional paid-in capital accounts, not resulting in a recognized gain in the income statement.

The Reacquisition of Common Shares for a Price Lower Than