Which of the Following Statements About Treasury Stock Transactions Is

question 38

Multiple Choice

Which of the following statements about treasury stock transactions is correct?

• A)The total number of shares issued increases when treasury stock is purchased.
• B)The total number of shares authorized changes when treasury stock is purchased.
• C)Gains and losses on treasury stock transactions are reported on the income statement.
• D)A stockholders' equity account is debited when treasury stock is purchased.

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Definitions:

Treasury Stock

Shares that were once part of the outstanding shares of a company but were subsequently repurchased by the company and are held in its treasury.

Stockholders' Equity

Refers to the owners' residual interest in the assets of a corporation, after deducting liabilities.

Dividend Yield

A financial measurement showcasing the ratio of a company's annual dividend payment to its current stock price.

Payout

Refers to the distribution of financial rewards or dividends to shareholders or the disbursement of funds to satisfy debts or expenses.