Treasury stock should be reported
A) as a current asset only if it will be sold within the next year or the operating cycle,whichever is longer.
B) as a current asset only if it will be sold within the next year or the operating cycle,whichever is shorter.
C) in the Investments and Funds section of the balance sheet.
D) as a deduction from total stockholders' equity on the balance sheet.

Question

Quizplus · Accepted Answer

Treasury stock represents shares of a company's own stock that have been repurchased and are no longer outstanding. When a company repurchases its own stock, the amount paid to acquire those shares is subtracted from total stockholders' equity on the balance sheet. Therefore, treasury stock should be reported as a deduction from total stockholders' equity on the balance sheet, rather than as a current asset or in the Investments and Funds section of the balance sheet.

Treasury Stock Should Be Reported