If treasury stock is sold at a price greater than its reacquisition cost,the difference is:
A)debited to Paid-in Capital from Treasury Stock Transactions.
B)credited to Paid-in Capital from Treasury Stock Transactions.
C)debited to Retained Earnings.
D)credited to Retained Earnings.

Question

Quizplus · Accepted Answer

When treasury stock is sold at a price greater than its cost, the difference is credited to Paid-in Capital from Treasury Stock Transactions. This account represents the excess of the selling price over the reacquisition cost of the treasury stock, and reflects additional capital provided by the shareholders. The other options (A, C, and D) are not correct as they do not reflect the correct accounting treatment for the sale of treasury stock.

If Treasury Stock Is Sold at a Price Greater Than