Which of the Following Is Not True Relating to Treasury

question 82

Multiple Choice

Which of the following is not true relating to treasury stock?

• A)A firm creates treasury stock when it repurchases its own stock and does not retire it.
• B)Treasury stock lowers the stock outstanding.
• C)Treasury stock may be recorded at the cost of the stock.
• D)Treasury stock may be recorded at par or stated value.
• E)Treasury stock is,in essence,an increase in paid-in capital.

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Definitions:

Financial Intermediary

is an institution that acts as the middleman between investors and firms, facilitating investments and financial transactions.

Holder-in-due-course Status

A legal status that provides a holder of a negotiable instrument certain rights, free from many defenses and claims that could be asserted against the original party.

Fraud in the Inducement

A type of fraud that occurs when false statements, promises, or misrepresentations lead another to enter into a contract or agreement.

Unauthorized Completion

The act of finishing or filling out a document or contract without the explicit authorization or consent of all parties involved.