A retirement of common stock:

Question

Quizplus · Accepted Answer

A retirement of common stock involves repurchasing shares of previously issued stock from shareholders, which decreases the number of shares of common stock outstanding. As a result, the balance in the common stock account also decreases. Since the company is buying back its own shares, there is no gain or loss reported on the income statement. Therefore, only options A is correct, as it reflects both the decrease in the number of shares and the reduction in the common stock account balance.

A Retirement of Common Stock