The purchase of treasury share for cash will have which effect upon the following items?
$\begin{array} { l l l l l }\text { Total Assets }& \text { Total Shareholders' } & \text { Shares Issued } & \text { Shares Outstanding }\
&\text { Equity }\\end{array}$
A.$\begin{array} { l l l l l }
& \text { Decrease } && \text { Decrease } &&&&& \text { Decrease } &&& \text { Decrease } \\end{array}$
B.$\begin{array} { l l l l l }& &\text { None } &&& \text { Increase } &&&&& \text { None } &&&& \text { Decrease } \\end{array}$
C. $\begin{array} { l l l l l }&& \text { Increase } && \text { Decrease } &&&& \text { Increase } &&& \text { Decrease } \\end{array}$
D. $\begin{array} { l l l l l }&& \text { Decrease } && \text { Decrease } &&&& \text { None } &&&& \text { Decrease } \end{array}$

Question

The purchase of treasury share for cash will have which effect upon the following items? 
$\begin{array} { l l l l l }\text { Total Assets }& \text { Total Shareholders' } & \text { Shares Issued } & \text { Shares Outstanding }\
&\text { Equity }\\end{array}$
A.$\begin{array} { l l l l l }
  & \text { Decrease } && \text { Decrease } &&&&& \text { Decrease } &&& \text { Decrease } \\end{array}$
B.$\begin{array} { l l l l l }& &\text { None } &&& \text { Increase } &&&&& \text { None } &&&& \text { Decrease } \\end{array}$ 
 C.  $\begin{array} { l l l l l }&& \text { Increase } && \text { Decrease } &&&& \text { Increase } &&& \text { Decrease } \\end{array}$
D. $\begin{array} { l l l l l }&& \text { Decrease } && \text { Decrease } &&&& \text { None } &&&& \text { Decrease } \end{array}$

Quizplus · Accepted Answer

The purchase of treasury shares for cash decreases total assets and total shareholders' equity because cash (an asset) is used to buy back shares, reducing equity. Shares issued remain unchanged, but shares outstanding decrease as the company holds more of its own shares.

The Purchase of Treasury Share for Cash Will Have Which