The Two Methods of Accounting for Treasury Stock Are the Cost

question 94

True/False

The two methods of accounting for treasury stock are the cost method and the fair value method.

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Definitions:

Prepaid Insurance

An asset account that represents insurance paid in advance, which is not yet expired and thus not yet an expense.

Owner's Capital

The equity in a firm attributable to the owner, reflecting the amount invested by and the earnings retained for the business owner.

Accounts Receivable

Monies owed to a company by customers for sales made on credit that are recorded as assets on the balance sheet.

General Journal

A foundational accounting record that keeps chronological entries of a company's transactions.