Treasury Stock Is

question 65

Multiple Choice

Treasury stock is

• A)shares owned by the directors of a company.
• B)shares owned by the management of a company.
• C)shares that are not yet sold but could be sold at any time by a company.
• D)previously issued shares of a company that are now held by the company.
• E)shares of a company held in reserve to eventually retire the debt of the company.

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Definitions:

Conservatism

An accounting principle that requires potential expenses and liabilities to be recognized immediately, while revenues are only recognized when they are assured.

Accounting Principle

A general rule or guideline that guides accounting practices, ensuring consistency, reliability, and transparency in financial reporting.

Cost Or Market

An accounting principle that states inventory should be recorded at either its historical cost or market value, whichever is lower.

Replacement Cost

The cost to replace an asset with another of similar quality and functionality at current market prices.