Treasury stock is shown as ________ on the balance sheet.

Question

Quizplus · Accepted Answer

Treasury stock represents shares that a company has bought back from its shareholders. Since these shares are no longer outstanding, they should be deducted from total shareholder's equity, which is why treasury stock is shown as a reduction of total shareholder's equity on the balance sheet. It does not affect total retained earnings, which is the cumulative total of the company's earnings and losses since its inception.

Treasury Stock Is Shown as ________ on the Balance Sheet