Quiz Ch 10 – T/F Recording Transactions with Treasury Stock
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
Transactions involving a company’s treasury stock are not recorded as gains or losses.
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.
In the statement of cash flows, the financing activities section shows cash inflows from the sale of treasury stock.
A positive balance in Retained Earnings signifies that a company has earned more than its losses and declared dividends over its lifetime.
Retained Earnings debit balance account signifies a deficit in Retained Earnings.
Retained Earnings contain cash allocated for stockholder dividends.
A corporation is a separate legal entity from its owners.