Which of the following is TRUE about reissuing treasury stock?
A) If treasury stock is sold at a higher price than the stock's cost when the company reacquired it, a gain will be recognized.
B) If treasury stock is sold at a higher price than the stock's par value, a gain will be recognized.
C) If the treasury stock is sold at a lower price than the amount of the original issuance, a loss will be recognized.
D) A gain or loss on the reissuance of treasury stock is never recognized.

Question

Quizplus · Accepted Answer

When treasury stock is reissued, no gain or loss is recognized in the income statement. Instead, any difference between the reissue price and the cost is recorded in equity accounts.

Which of the Following Is TRUE About Reissuing Treasury Stock