Treasury Stock: Definition, Accounting Method & Formula


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question 1 of 3

What do you call the type of stock held by a company prior to being issued or after being bought back from investors?

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1. Why might a company hold stock in its treasury?

2. Which of the following statements about treasury stock is correct?

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About This Quiz & Worksheet

This quiz and attached worksheet will assess your understanding of the treasury stock accounting method. Quiz questions will test you on topics such as the name for the type of stock held by a company before being issued and the reasons for a company to hold stock in its treasury.

Quiz & Worksheet Goals

Use these study resources to:

  • Recognize accurate statements about treasury stock
  • Understand the difference between outstanding shares and authorized shares
  • Identify the necessary step when accounting for the purchase of treasury stock

Skills Practiced

Factor the following skills into your studies:

  • Distinguishing differences - compare and contrast topics from the lesson, such as outstanding shares and authorized shares
  • Information recall - access the knowledge you've gained regarding why a company would hold stock in its treasury
  • Knowledge application - use your knowledge to answer questions about accounting for treasury stock purchases

Additional Learning

The lesson will focus on the area of study that is treasury stock accounting. Find out more about this subject with this lesson named Treasury Stock: Definition, Accounting Method & Formula. The lesson will cover the following study guidelines:

  • Understand what dividends are
  • Explain a hostile takeover
  • Identify how companies prepare for the future
  • Analyze the accounting method for treasury stock
  • Recognize what capital is
  • Define a contra equity account