The Par Value Method of Reporting a Treasury Stock Transaction

question 51

Multiple Choice

The par value method of reporting a treasury stock transaction

• A) Will be reported in the balance sheet as a reduction of total stockholders' equity.
• B) Results in no change to total stockholders' equity.
• C) Results in a reduction in the number of shares that are available to be sold to prospective investors.
• D) Assumes constructive retirement of the treasury shares.

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Definitions:

Symmetric

A characteristic of shapes, equations, or other entities that remain unchanged when reflected, rotated, or transformed in specific ways.

Tails

The ends of a distribution curve, referring to the extreme values far from the mean in a probability distribution.

Mean

The arithmetic average of a set of numbers, calculated by dividing the sum of the values by the number of values.

Variance

A measure of how much values in a dataset differ from the mean, indicating the distribution's spread.