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Does the acquisition of treasury stock increase cash?

Treasury stock is stock that the issuing company buys back from the shareholders. Since the company is buying back its own shares, it decreases cash and stockholder equity, but increases a new balance called "Treasury Stock".


Purchase return Accounting?

"Purchase returns" is the entry made in the journal that refers to "Unsatisfactory or defective merchandise/goods which is returned back to the supplier".


What entry do you make in the post reference column of the ledger to show that you posted the transactions from the journal?

The "Post Reference" or PR is used ona Ledger to lead you back to the original transaction by identifying the Journal and the page in the Journal. Example - GJ1 = General Journal, page 1. On a Journal the PR can be used to identify the account number used from the chart of accounts


What is it called when a company buys back its own stock?

It is called a stock repurchase and is posted to an account called Treasury Stock, a contra-account in the Equity section.


What is Wash Sale tax rule?

A wash sale is where you sell stock at a loss, then buy a substantially identical security to replace it during a 61-day time period starting 30 days before the sale and ending 30 days after it. If you do this, you can't deduct the loss. Three things happen in a wash sale from a tax standpoint--you can't deduct the loss on the wash sale, the loss is added to the basis of the replacement stock, and the holding period of the replacement stock is set to the holding period of the washed stock. The first one is the reason for the wash sale rule. The reason for the rule should be obvious: too many people were saving too much on their taxes by unloading stock, deducting the tax loss, then buying it back the same day because it's good stock and it's really cheap now. The second one is nice: if you bought stock for $100, sold it for $40 and bought it back a day later for $39, the IRS allows you to adjust your new stock's basis to $99--$39 stock price plus the $60 in disallowed loss. (The reason it's nice is it reduces your capital gain--or increases your loss--when you sell the replacement securities.) The third could screw you up depending on how long you held the stock in the first place: if you owned Acme for 20 years and dumped it in a wash sale, the IRS says you owned the replacement shares for 20 years. There are two ways to get around the wash sale rule: wait 31 days before buying the new stock, or buy stock in another company.

Related Questions

What journal entry do you make to record product shortage?

a back order


What is the process of selling and then buying back the same stock called?

The process of selling and then buying back the same stock is called a "round trip trade."


What is the strategy of selling a stock and then buying it back at a later time called?

The strategy of selling a stock and then buying it back at a later time is called "short selling."


What is the strategy of selling a stock and buying it back in order to potentially profit from fluctuations in the market?

The strategy of selling a stock and buying it back to potentially profit from market fluctuations is called "short selling." This involves borrowing a stock, selling it at the current price, and then buying it back at a lower price to return it to the lender, pocketing the difference as profit.


N morrowind can you get back into a guild being expelled twice?

No, you can't. When you're expelled from it the second time you should have a journal entry that tells you that you're permanently expelled from the Guild. If you don't get the entry in your journal, then talk to the person that you'd usually talk to to get back in. They'll tell you they can't allow you back into the Guild.


What is the definition of the term treasury stock?

The term "Treasury Stock" is defined as the stock that is brought back by the corporation that issued it earlier. The purpose of buying back the stock is either for resale or retirement and the availability of the outstanding stock is much reduced.


Does the acquisition of treasury stock increase cash?

Treasury stock is stock that the issuing company buys back from the shareholders. Since the company is buying back its own shares, it decreases cash and stockholder equity, but increases a new balance called "Treasury Stock".


Purchase return Accounting?

"Purchase returns" is the entry made in the journal that refers to "Unsatisfactory or defective merchandise/goods which is returned back to the supplier".


Reason to short a stock?

Well, you sell a stock short when you believe the price of the security will drop then you can buy it back at a lower price then you bought it for. You can also short a stock by buying "put" options.


What entry do you make in the post reference column of the ledger to show that you posted the transactions from the journal?

The "Post Reference" or PR is used ona Ledger to lead you back to the original transaction by identifying the Journal and the page in the Journal. Example - GJ1 = General Journal, page 1. On a Journal the PR can be used to identify the account number used from the chart of accounts


Would buying back stock reduce stockholders equity?

Yes buying back shares from investors is reduction of stockholders equity in business and normally it is done when excel capital is available as well as to gain more control of business.


What are some good articles or websites to research the stock options backdating scandal?

The stock option back dating scandal was widely covered by mainstream media like CNBC, FoxNews, Reuters and major business journals like the Wall Street Journal and others. All these will explain how the stock options were being granted after the fact and then being subsequently back dated for the lowest stock price.