Asked by Rachel Lopke on May 16, 2024
Verified
Net income decreases when treasury stock is sold for an amount less than the original cost when the shares of stock were repurchased.
Repurchased
Refers to the act of a company buying back its own shares from the marketplace, which can affect the company's stock price and earnings per share.
- Investigate the effects of stock transactions on the equity held by stockholders.
- Understand the concept of earnings per share and how it is calculated.
Verified Answer
NN
Nupur NatarajaMay 21, 2024
Final Answer :
False
Explanation :
Net income is not affected by transactions involving treasury stock, including sales below the original repurchase cost, as these transactions are recorded directly in equity, not on the income statement.
Learning Objectives
- Investigate the effects of stock transactions on the equity held by stockholders.
- Understand the concept of earnings per share and how it is calculated.
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