Treasury stock should be reported as a(n)
A)current asset.
B)investment.
C)other asset.
D)reduction of shareholders' equity.

Question

Quizplus · Accepted Answer

Treasury stock is considered a reduction of shareholders' equity because it represents shares of a company's own stock that have been repurchased by the company and are therefore no longer outstanding. As a result, treasury stock is deducted from the total amount of shareholders' equity on the balance sheet. It is not considered an asset or an investment because it does not represent a claim on any future economic benefits.

Treasury Stock Should Be Reported as A(n)