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8 November, 07:36

Which of the following is true regarding treasury stock transactions by a corporation?

a. May decrease but not increase net income.

b. May decrease but not increase retained earnings.

c. May increase but not decrease retained earnings.

d. May increase net income if the cost method is used.

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Answers (1)
  1. 8 November, 08:34
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    B) May decrease but not increase retained earnings.

    Explanation:

    The treasury stock represents the total stock repurchased by the company from the open market, to achieve it the company take money from the retaining earnings which is the money available to the company, which can be used in this kind of operations, purchase of assets or pay dividends.
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Home » Business » Which of the following is true regarding treasury stock transactions by a corporation? a. May decrease but not increase net income. b. May decrease but not increase retained earnings. c. May increase but not decrease retained earnings. d.
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