Treasury stock was acquired for cash at a price in excess of its par value. The treasury stock was subsequently reissued for cash at a price in excess of its acquisition price. If the cost method of accounting for treasury stock transactions is used, what is the effect in retained earnings? Acquisition of Treasury Stock and Reissuance of Treasury Stock.

a) No Effect Increase

b) No Effect No Effect

c) Increase Decrease

d) Decrease Increase

2. The amount of stock that a corporation has sold at some point in time is called:

a) Authorized Stock

b) Capital Stock

c) Issued Stock

d) Outstanding Stock

3. Which of the following is most relevant in determining the cost of assets acquired in exchange for capital stock?

a) par or stated value of common stock

b) fair market value of the stock

c) fair market value of the asset

d) issuance price of stock already outstanding