Which One of the Following Statements Is Not True

question 70

Multiple Choice

Which one of the following statements is not true?

• A)Treasury stock transactions do not result in gains or losses on the income statement.
• B)Retained earnings may be restricted regarding dividends when treasury stock is held.
• C)The total amount of stockholders' equity is unaffected by the method used to account for treasury stock.
• D)Treasury stock transactions may result in an increase to retained earnings.

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Definitions:

Financial Information

Data relating to the financial health, performance, and condition of an entity, including profits, losses, assets, and liabilities.

Common Size Percentages

Financial analysis tool that expresses each line item in a financial statement as a percentage of a base figure.

Cost of Goods Sold

Direct costs attributable to the production of the goods sold by a company, including materials and labor costs.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations, calculated as current assets divided by current liabilities.