Asked by Khush Bhullar on May 08, 2024
Verified
A corporation purchased 110 shares of treasury stock for $45. The entry to record the transaction would include a:
A) debit to Cash for $4,950.
B) credit to Treasury Stock for $4,950.
C) debit to Treasury Stock for $4,950.
D) None of these answers is correct.
Treasury Stock
Shares of a company's own stock that it has reacquired from shareholders, but not retired, and may resell in the future.
Cash
Money in the form of coins or banknotes, especially that issued by a government, and available for immediate use in transaction.
- Acquire knowledge about the accounting practices and financial statement presentations for transactions involving treasury stock.
Verified Answer
SS
Sumia Sami1May 14, 2024
Final Answer :
C
Explanation :
The correct entry for purchasing treasury stock involves debiting (increasing) the Treasury Stock account by the total purchase amount, which is calculated as 110 shares times $45 per share, equaling $4,950.
Learning Objectives
- Acquire knowledge about the accounting practices and financial statement presentations for transactions involving treasury stock.
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