Which of the Following Is True About Treasury Shares

question 88

Multiple Choice

Which of the following is true about treasury shares?

• A) Treasury shares are held by shareholders.
• B) Treasury shares increase retained earnings.
• C) Treasury shares increase the number of common shares outstanding.
• D) If treasury shares are sold for more than cost,this results in a gain for the company.
• E) Treasury Shares are reported as a separate item in the equity section of the balance sheet.

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Definitions:

Purchasing Power

A currency's value measured by the volume of goods or services purchasable with one monetary unit.

Bank Account

A financial arrangement made with a banking institution where funds can be deposited for safekeeping, which can include various types such as savings, checking, and deposit accounts.

Nominal Interest Rate

The interest rate before adjustment for inflation, representing the face value of financial transactions.

Real Interest Rate

The interest rate that accounts for inflation, reflecting the actual cost of borrowing and the real return on savings.