Question 8

All of the following statements regarding treasury stock are true EXCEPT which one?

a. It should be recorded on the Balance Sheet as an asset.

b. They are shares that have been bought back by the corporation and are being held by the corporation.

c. It has a normal debit balance

d. It is a contra-stockholders' equity account

Question 9

ROK Corporation purchased 4,000 shares of its own $8 par value common stock for $17 per share, the current market price. The journal entry to record this transaction would include a:

a. Credit to Paid in Capital Excess of Par-Treasury Stock for $36,000

b. Credit to Cash for $32,000

c. debit Treasury Stock for $68,000

d. debit to Treasury Stock for $32,000

Question 17

Which of the following statements regarding dividends in arrears on cumulative preferred stock is FALSE?

a. they are dividends that have not been declared for a given period of time.

b. they should be disclosed in the notes to the financial statements

c. they must be paid before common stockholders can receive a dividend

d. they are dividends that have been declared but not yet paid.