Answer the following statements true (T) or false (F)
1. Treasury stock is recorded at cost, without reference to par value.
2. Treasury stock has voting rights and receives cash or stock dividends.
3. The journal entry for the purchase of treasury stock includes a credit to Cash.
4. The journal entry to record the purchase of treasury stock includes a debit to Treasury Stock -
Common for the shares purchased multiplied by the par or stated value of the stock.
5. If treasury stock is resold for more than cost, the difference is debited to the account Paid-In Capital
from Treasury Stock Transactions.
1. TRUE
2. FALSE - Explanation: Treasury stock does not carry a vote, and it receives no cash or stock dividends. 3. TRUE
4. FALSE - Explanation: The journal entry to record the purchase of treasury stock includes a debit to Treasury Stock - Common for the purchase price of the shares.
5. FALSE - Explanation: If treasury stock is resold for more than cost, the difference is credited to the account Paid-In Capital from Treasury Stock Transactions.
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