Treasury Stock Represents

question 56

Multiple Choice

Treasury stock represents:

• A)Shares of ownership in the United States Treasury Department.
• B)A current asset.
• C)Authorized shares that have never been issued.
• D)Previously outstanding shares that have been repurchased by the issuing company.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.

Average Accounting Return

The ratio of the average net income that an investment generates to the average book value of the investment over its life.

Salvage Value

The estimated residual value of an asset after it has been fully depreciated and is no longer in use.

Straight-line Method

A technique that evenly distributes the expense of an asset across its lifespan for depreciation calculation.