Which of the Following Is True About Reissuing Treasury Stock

question 116

Multiple Choice

Which of the following is true about reissuing treasury stock?

• A)If treasury stock is sold at a higher price than the stock's cost when the company reacquired it,a gain will be recognized.
• B)If treasury stock is sold at a higher price than the stock's par value,a gain will be recognized.
• C)If the treasury stock is sold at a lower price than the amount of the original issuance,a loss will be recognized.
• D)A gain or loss on the reissuance of treasury stock is never recognized.

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Definitions:

Internal Growth

The process of expanding a firm's operations from its own internally generated resources, without relying on takeovers or mergers with other companies.

Ownership Guarantees

An assurance provided by a seller to a buyer that they have the right to sell the property and there are no claims against it.

Minimum Level

The lowest acceptable limit or quantity.

Firm Control

Refers to the power to make significant decisions within a company, often held by the management team or major stakeholders who can influence business direction and policies.