Which statement is incorrect? * a. On repurchase of treasury shares, no gain or loss is recognized. The purchase price would become the cost of treasury shares. b. On reissuance of treasury shares, the difference between the cost and reissue price of treasury shares is debited or credited to share premium rather than to profit or loss. c. If treasury shares are retired above par, the difference between the cost and the par value is automatically charged to retained earnings. d. Treasury shares can be subjected to share split and can be re-issued as share dividends. e. none of the above
1.Which statement is incorrect? *
a. On repurchase of treasury shares, no gain or loss is recognized. The purchase price would become the cost of treasury shares.
b. On reissuance of treasury shares, the difference between the cost and reissue price of treasury shares is debited or credited to share premium rather than to profit or loss.
c. If treasury shares are retired above par, the difference between the cost and the par value is automatically charged to retained earnings.
d. Treasury shares can be subjected to share split and can be re-issued as share dividends.
e. none of the above
2. Which statement is incorrect?
a. Dividends out of retained earnings is limited to the balance of unappropriated retained earnings, except for share dividends.
b. Cash dividends are paid on the basis of the number of shares issued less the number of treasury shares.
c. Property dividends payable shall be measured based on fair value of the property on the date of declaration, reporting and distribution.
d. All kinds of dividends not yet paid shall be presented under the liability section of the
e. none of the above
3. Which statement is incorrect?
a. When a dividend is declared and paid in shares of stock, total shareholders’ equity does not change.
b. Retained earnings is capitalized in a share dividend.
c. When treasury shares are reissued as dividends,
d. In closely held entities, if share dividends are declared, accumulated profits shall be capitalized at par or stated value of the shares.
e. none of the above
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