CFA Practice Question
Treasury stock is disclosed in the financial statements as a ______.
A. current asset
B. note
C. reduction in total stockholders' equity
Explanation: Treasury stock is a contra account for stockholders' equity. Corporate assets (cash) were expended when the treasury stock was purchased and stockholders' equity was decreased by a corresponding amount.
User Contributed Comments 2
| User | Comment |
|---|---|
| maria15 | Is it because treasury stock is a repurchased stock? |
| sevywonder | @maria15 I'm almost certain that's the case |