Which of the Following Is True Concerning the Treasury Stock

question 61

Multiple Choice

Which of the following is true concerning the treasury stock approach in accounting for a subsidiary's investment in parent company stock?

• A) The original cost of the subsidiary's investment reduces long-term liabilities.
• B) The cost of parent shares is treated as if the shares are no longer outstanding.
• C) The subsidiary must apply the equity method in accounting for the investment if the treasury stock approach is used.
• D) The treasury stock approach increases total stockholders' equity.
• E) The cost of parent shares is treated as if the shares are no longer issued.

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Definitions:

Client-Centered Therapy

A form of psychotherapy developed by Carl Rogers emphasizing the client's capacity for self-direction and understanding of one's own feelings.

Systematic Desensitization

A behavioral therapy technique used to reduce phobic or anxiety responses by gradually exposing the person to the feared object or situation in a controlled manner.

Humanistic Therapy

A form of psychotherapy that emphasizes personal growth and the concept of self-actualization.

Cognitive Therapy

A type of psychotherapy that focuses on changing negative patterns of thought to improve emotional well-being and behavior.