Which of the Following Statements About Treasury Stock Is Correct

question 106

Multiple Choice

Which of the following statements about treasury stock is correct?

• A)When a company reissues treasury stock for more than it originally paid for the stock,it does not report a gain.
• B)When a company purchases treasury stock,it increases total stockholders' equity.
• C)Treasury stock is reported as an asset on the balance sheet.
• D)Treasury stock is reported as issued and outstanding stock.

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Definitions:

Balance Sheet Accounts

Accounts displayed on the balance sheet that represent the company's assets, liabilities, and ownership equity at a specific point in time.

Posting

The process of transferring journal entries to the ledger accounts in accounting.

Equality

The balance between the total debits and total credits in an account, ensuring that all financial transactions are properly recorded.

Debits And Credits

The two fundamental aspects of every financial transaction in double-entry bookkeeping, where debits must equal credits.