Which Statement Best Describes the Accounting When a Company Cancels

Which statement best describes the accounting when a company cancels its own shares at an amount greater than their par value?

A) Retained earnings will be debited at an amount equal to the par value of the shares.
B) Retained earnings will be credited at an amount equal to the par value of the shares.
C) Contributed surplus will be debited at an amount equal to the par value of the shares.
D) Share capital will be debited at an amount equal to the par value of the shares.

Correct Answer:

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