What Effect Does the Purchase of Treasury Stock Have on the Balance

question 100

Multiple Choice

What effect does the purchase of treasury stock have on the balance sheet? $\begin{array}{|l|l|l|l|}\hline & \text { Total Assets } & \text { Total Liabilities } & \text { Stockholder'sEquity } \\\hline \text { A) } & \text { No effect } & \text { No effect } & \text { No effect }\\\hline\end{array}$ $$\begin{array} { | l | l | l | l | } \hline & \text { Tatal Assets } & \text { Tatal Liabilities } & \text { Stackhalder's Equity } \\\hline \text { B) } & \text { Decrease } & \text { No effect } & \text { Decrease } \\\hline\end{array}$$ $\begin{array}{|l|l|l|l|}\hline & \text { Total Assets } & \text { Total Liabilities } & \text { Stockholder'sEquity } \\\hline \text { C) } & \text { Increase } & \text { No effect } & \text { Increase }\\\hline \end{array}$ $\begin{array}{|l|l|l|l|}\hline & \text { Total Assets } & \text { Total Liabilities } & \text { Stockholder'sEquity } \\\hline \text { D) } & \text { Decrease } & \text { Decrease } & \text { Increase }\\\hline\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Unrealistic Assumption

A simplified or idealized condition used in economic models or theories that may not fully represent real-world complexities.

Economic Behavior

The study of the decision-making processes and actions of individuals and institutions regarding economic variables.

Microeconomics

The study of the economic behavior in particular markets, such as that for computers or unskilled labor.

Equilibrium Economics

A state in economic models where supply equals demand, leading to stable prices and quantities.