A Corporation Purchased 10,000 Shares of Its Own $20 Par

question 58

Multiple Choice

A corporation purchased 10,000 shares of its own $20 par value common stock for $30 per share. The effect on total stockholders' equity is:

• A)$200,000 increase.
• B)$200,000 decrease.
• C)$300,000 increase.
• D)$300,000 decrease.

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Definitions:

Pledged Financing

Financing obtained by offering assets as collateral to secure the loan, reducing the lender's risk.

Assignment Of Receivables

The transfer of a company's right to receive money from a debtor to another party.

Accounts Receivable Period

The mean duration a company requires to receive payments from its clients following a sale.

Quarterly Sales

Revenue generated by a company, or the amount of goods/services sold within a specific three-month period.