Which of the Following Statements Is True Regarding a Corporation's

question 224

Multiple Choice

Which of the following statements is true regarding a corporation's purchase of treasury stock?

• A)The cost of treasury stock is a reduction in stockholders' equity.
• B)Dividends must still be paid on treasury stock because it is still issued.
• C)Treasury stock is reported as an asset because it is considered an investment in the corporation's own stock.
• D)Treasury stock is no longer considered issued once it is back in the hands of the issuer.

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Definitions:

Permission

Consent or authorization given by one party to another to do something that is not allowed without such consent.

Owner

An individual or entity that has legal title to, or vested interest in, property or assets.

Easement Appurtenant

A right for the benefit of one piece of land (dominant estate) that allows access or use of a neighboring land (servient estate).

New Owner

The individual or entity that acquires ownership or property rights in something, such as real estate or a company, often through purchase or transfer.