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FT - Evaluation Quiz 3

The acquisition of treasury stock by a corporation increases its total assets and total stockholders' equity. Treasury stock is generally accounted for by the cost method. Treasury Stock is a contra stockholders’ equity account.

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LLYOD FRANCIS LAYLAY
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41 views1 page

FT - Evaluation Quiz 3

The acquisition of treasury stock by a corporation increases its total assets and total stockholders' equity. Treasury stock is generally accounted for by the cost method. Treasury Stock is a contra stockholders’ equity account.

Uploaded by

LLYOD FRANCIS LAYLAY
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as TXT, PDF, TXT or read online on Scribd
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The acquisition of treasury stock by a corporation

increases its total assets and total stockholders' equity.


decreases its total assets and total stockholders' equity.
has no effect on total assets and total stockholders' equity.
requires that a gain or loss be recognized on the income statement.

The acquisition of treasury stock by a corporation


increases its total assets and total stockholders' equity.
decreases its total assets and total stockholders' equity.
has no effect on total assets and total stockholders' equity.
requires that a gain or loss be recognized on the income statement.

Treasury stock is generally accounted for by the


cost method.
market value method.
par value method.
stated value method.

Treasury Stock is a(n)


contra asset account.
retained earnings account.
asset account.
contra stockholders’ equity account.

Four thousand shares of treasury stock of Meyer, Inc., previously acquired at $12
per
share, are sold at $18 per share. The entry to record this transaction will include
a
credit to Treasury Stock for $72,000.
debit to Paid-In Capital from Treasury Stock for $24,000.
debit to Treasury Stock for $48,000.
credit to Paid-In Capital from Treasury Stock for $24,000.

When preferred stock is cumulative, preferred dividends not declared in a period


are
considered a liability.
called dividends in arrears.
distributions of earnings.
never paid.

Dividends in arrears on cumulative preferred stock


never have to be paid.
must be paid before common stockholders can receive a dividend.
should be recorded as a current liability until they are paid.
enable the preferred stockholders to share equally in corporate earnings with the
common stockholders

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