When treasury shares are resold at a price below cost:
A)Paid-in capital and/or retained earnings is reduced.
B)Paid-in capital and/or retained earnings is increased.
C)Retained earnings is always reduced.
D)A loss is taken on the income statement.

Question

Quizplus · Accepted Answer

When treasury shares are resold below cost, the difference is typically charged against paid-in capital from treasury stock transactions, and if that is insufficient, retained earnings may be reduced.

When Treasury Shares Are Resold at a Price Below Cost