Question

Treasury stock is:

a. Common stock acquired by the company in the open market & recorded as negative equity
b. Authorized but unissued common stock
c. Decrease in net assets from peripheral transactions
d. Gains recorded directly to stockholders equity

Answer 1

The correct answer is letter "A": Common stock acquired by the company in the open market & recorded as negative equity.

Step-by-step explanation:

Treasury Stock is the legal stock of a corporation that it keeps for later use in its treasury. Usually, a firm buys its treasury stock on the open market. Treasury stock may also exist because not all of the outstanding shares were sold by the issuing company. Treasury stock is a counter-equity account reported in the balance sheet portion of the shareholder's equities.

Answer 2

a. Common stock acquired by the company in the open market & recorded as negative equity

Step-by-step explanation:

A stock which is buy back from the market at market rate issued by the company. It reduces the total outstanding shares of the company. It is the difference of Number of share issued and Number of share outstanding. Its account is consider as contra equity account. So the correct option is a. Common stock acquired by the company in the open market & recorded as negative equity.