Treasury stock transactions affect:

A Revenue

B Stockholders equity (reduce on repurchase, increase on reissuance)

C Net income

D Operating expenses

✓ Correct Answer: Option B

Treasury stock is contra-equity. Repurchase reduces equity. Reissuance increases it. No income statement impact for treasury stock transactions.

💡 Why is B) the correct answer?

The correct answer to the question "Treasury stock transactions affect:" is Option B: Stockholders equity (reduce on repurchase, increase on reissuance).

The other options — A) Revenue, C) Net income, D) Operating expenses — are incorrect for this CPA Exam Prep question. As explained above: Treasury stock is contra-equity. Repurchase reduces equity. Reissuance increases it. No income statement impact for treasury stock transactions.

📚 About This CPA Exam Prep Practice Question

This 2-level CPA Exam Prep question from the Financial Accounting (FAR) topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CPA Exam Prep practice test or use flashcards for spaced repetition review.

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Treasury stock transactions affect:

✓ Correct Answer: Option B

📚 About This CPA Exam Prep Practice Question

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