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What happens when a firm purchases its own shares as treasury stock?

When a firm purchases its own shares as treasury stock, those shares are removed from circulation and held by the company itself. This can lead to a reduction in the total number of outstanding shares, potentially increasing earnings per share (EPS) and the value of remaining shares. Treasury stock does not pay dividends or have voting rights, and it can be reissued or retired in the future, depending on the company's strategy. Overall, this action can signal confidence in the company's value or be used for stock-based compensation plans.


What type of account is treasury stock?

Treasury stock is a stockholders equity stock. Treasury stock is stock that a company buys back in order to reduce the amount of outstanding stock available on the market.


When a treasury stock is reissued for less than its cost what is credited?

the treasury stock account


Do you include treasury stock in stock splits?

no.


Are dividends paid on treasury stock?

cash dividends are not paid on treasury stock, but what about stock dividends? I would think stock dividends would apply to treasury shares, but would like to know for sure. Also, I assume stock splits apply to treasury shares and would like this verified.


Is treasury stock the same as capital stock?

Treasury stock is contra of capital stock used by company to purchase own capital stock to reduce the paid in capital.


What is retained earnings a asset?

When a company purchases stocks, it is shown as an investment on the Asset side of the Balance Sheet. However, if a company buys back its own stock, it is shown in the Retained Earnings section of the Balance Sheet as Treasury Stock.


Does the acqusion of treasury stock by a corporation increase total assets and total stockholders equity?

Treasury Stock is the stock that the corporation has sold and then reacquired. Treasury Stock is a Contraequity account that increases when debited and decreases when credited. Does this answer your question.


Is stock repurchased by the issuing company called treasury stock?

1. Treasury stock is a corporation's own stock that has been issued, fully paid for, and reacquired by the corporation and is being held in it's treasury for future use.


What is the journal entry for repurchasing common stock as treasury stock?

Debit treasury stockCredit cash / bank


When the selling price of treasury stock is greater than its cost the company credits the difference to?

Treasury Stock


Treasury stock is classified as?

Treasury stock is a contra-equity account. It reduces shareholder's equity to its true value.