Depreciation Is a Process of Cost Allocation, Not a Process

question 70

True/False

Depreciation is a process of cost allocation, not a process of valuation.

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Definitions:

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders, not considered when calculating earnings per share or dividend distributions.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company's profits and a right to vote on shareholder matters.

Treasury Stock

Treasury stock consists of shares that were issued and later reacquired by the company. These shares do not pay dividends and do not have voting rights.

Par Common Stock

The nominal or face value of a share of common stock as stated in the corporate charter, which has no direct relation to the market value.