Quiz Ch 10 – T/F Impact of Treasury Stock Purchase on Assets and Equity
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
When a corporation buys back its stock, total assets and stockholders’ equity increase.
When a corporation buys back its stock, total assets and stockholders’ equity increase.
No journal entry is recorded on the date of record for cash dividends.
Stockholders’ liability for a corporation’s debts is limited.
A company may exchange assets for common stock instead of cash.
Preferred Stock is listed after Common Stock in the stockholders’ equity section of the balance sheet.
Transactions involving a company’s treasury stock are not recorded as gains or losses.
A liability is recorded for unpaid dividends on cumulative preferred stock.
Purchasing treasury stock reduces the number of outstanding shares.
Reissued shares can come from retired stock.
The market value per share equals the price-earnings ratio.