Which of the following statements about treasury stock is correct?
A)When a company reissues treasury stock for more than it originally paid for the stock,it does not report a gain.
B)When a company purchases treasury stock,it increases total stockholders' equity.
C)Treasury stock is reported as an asset on the balance sheet.
D)Treasury stock is reported as issued and outstanding stock.

Question

Quizplus · Accepted Answer

When a company reissues shares previously reported as treasury stock,it does not report a gain or loss on sale,even if it issues the shares for more or less than they cost when the company reacquired them.Treasury stock is not an asset.It is a permanent account that is reported as contra-equity,subtracted from total stockholders' equity.Outstanding shares are issued shares that are currently held by stockholders and not the corporation itself.Treasury stock is issued,but is not outstanding.

Which of the Following Statements About Treasury Stock Is Correct