Question

Treasury stock​ ________. A. decreases the number of shares issued B. increases the number of shares outstanding C. increases the number of shares issued D. decreases the number of shares outstanding

Answer 1

Answer:

Correct option is (D)

Explanation:

Treasury stock refers to that part of  shares outstanding held by the investors that is bought back by the organization. As such, treasury stock decrease the number of shares outstanding.

Shares outstanding refers to the total number of shares held by investors currently. Difference between issued and shares outstanding represent treasury stock. It reduces both cash (asset) and total stockholder's equity of an organization.