Which of the following best describes the possible result of treasury share transactions? a. May decrease but not increase net income. b. May increase net income if the cost method is used. c. May increase but not decrease retained earnings. d. May decrease but not increase retained earnings.

Which of the following best describes the possible result of treasury share transactions? a. May decrease but not increase net income. b. May increase net income if the cost method is used. c. May increase but not decrease retained earnings. d. May decrease but not increase retained earnings.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Which of the following best describes the possible result of treasury share transactions?

a. May decrease but not increase net income.

b. May increase net income if the cost method is used.

c. May increase but not decrease retained earnings.

d. May decrease but not increase retained earnings.

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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