All of the Following Regarding Accounting for Treasury Stock Under

question 93

Multiple Choice

All of the following regarding accounting for Treasury Stock under U.S.GAAP and IFRS is true except:

• A)U.S.GAAP applies the principle that companies do not record gains or losses on transactions involving their own stock.
• B)Only gains are recognized on retirements of treasury stock under IFRS.
• C)IFRS applies the principle that companies do not record gains or losses on transactions involving their own stock.
• D)Gains are not recognized on retirements of treasury stock under U.S.GAAP.
• E)A company's assets and equity are always reduced by the amount paid for the retiring stock.

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Definitions:

Laissez-Faire

A hands-off approach to economic policy where government intervention in business affairs is minimized.

Market System Characteristics

Features distinctive to market economies, such as private property, profit motive, consumer sovereignty, and competition.

Specialization

The concentration of the productive efforts of individuals or firms on a limited number of activities, leading to increased efficiency.

Production

The process of creating goods or services by combining various inputs like labor, materials, and technology.