Which Statement About a "Treasury Shares" Is Correct

question 15

Multiple Choice

Which statement about a "treasury shares" is correct?

• A)No company is permitted to hold treasury shares.
• B)Treasury shares have voting rights.
• C)Treasury shares receive dividends.
• D)There are two methods that can be used to account for treasury shares: the single-transaction method and the two-transaction method.

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Definitions:

Earnings Per Share

A measure of a company's profitability, calculated by dividing the company's net income by the number of its outstanding shares.

Current Liabilities

Obligations or debts that a company must pay within a year.

Debt-To-Equity Ratio

A measure that compares a company's total liabilities to its shareholder equity, used to evaluate financial leverage.

Acid-Test Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets (cash, marketable securities, and receivables), indicating liquidity without relying on inventory sales.