Chapter 7 Flashcards
1
Q
How do you account for a stock dividend?
A
Receipt of stock dividend is not revenue. It increases the # of shares held and decreases the costs basis per share.
2
Q
If a corporation sells some of its treasury stock at a pr that exceeds its cost, this excess should be:
A
credited to APIC.
There is no g/L on the purchase and/or sale of treasury stock. Any difference goes to paid in capital. If there isnt enough PIC to absorb a loss, the loss would be debited (subtracted) from RE.
