Which of the Following Balance-Sheet Accounts Will Be Affected When

question 109

Multiple Choice

Which of the following balance-sheet accounts will be affected when the company buys back some of its outstanding shares?

• A) Retained earnings
• B) Additional paid-in capital
• C) Treasury shares at cost
• D) All of these

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Definitions:

IRR

A capital budgeting tool, the Internal Rate of Return calculates the anticipated profit percentage of prospective investment projects.

Straight-Line Method

A depreciation accounting method that allocates the cost of a fixed asset evenly over its useful life.

Salvage Value

The estimated resale or scrap value of an asset at the end of its useful life, considered in depreciation calculations.

Working Capital

A measure of a company's liquidity, operational efficiency, and short-term financial health, calculated as current assets minus current liabilities.