When a Company Purchases Treasury Stock,which of the Following Statements

question 92

Multiple Choice

When a company purchases treasury stock,which of the following statements is true?

• A)Treasury stock is considered to be an asset because cash is paid for the stock.
• B)The cost of the treasury stock reduces stockholders' equity.
• C)Dividends continue to be paid on the treasury stock because it is still issued.
• D)Since treasury stock is held by the original issuer,it is no longer considered to be issued.

---

Definitions:

Compound

An entity produced through the chemical synthesis of several elements in constant ratios.

Mechanism

The detailed process or steps through which a chemical reaction occurs, explaining how reactants are transformed into products.

Reaction

A process in which substances, the reactants, transform into different substances, the products, through breaking and forming of chemical bonds.

Organic Chemistry

The scientific study of the structure, properties, composition, reactions, and synthesis of organic compounds that contain carbon in covalent bonding.