Treasury stock should not be classified as a current asset.

Question

Quizplus · Accepted Answer

Treasury stock is typically classified as a contra-equity account on the balance sheet, reducing the total amount of stockholders' equity. It is not considered a current asset because it represents shares of a company's own stock that have been repurchased and are no longer outstanding. As such, they cannot be readily converted into cash in the short term like current assets such as cash, accounts receivable, and inventory.

Treasury Stock Should Not Be Classified as a Current Asset