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Homework answers / question archive / The purchase of treasury stock: increases total assets and decreases total stockholders' equity

The purchase of treasury stock: increases total assets and decreases total stockholders' equity

Accounting

The purchase of treasury stock:

    1. increases total assets and decreases total stockholders' equity.
    2. decreases total assets and increases total stockholders' equity.
    3. increases total assets and increases total stockholders' equity.
    4. decreases total assets and decreases total stockholders' equity.

 

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Answer:

d .

Step-by-Step explanation

In case of buying of treasury stock i.e is a stock brought back by company from its shareholders,a contra entry is done in the balance sheet where in both the assets and stockholders equity are decreased.

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