Question: 1. Consider treasury stock. Which statement is true? a. Treasury stock shows as a contra-stockholders' equity account. b. Treasury stock involves the company buying another

1. Consider treasury stock. Which statement is true? a. Treasury stock

1. Consider treasury stock. Which statement is true? a. Treasury stock shows as a contra-stockholders' equity account. b. Treasury stock involves the company buying another company's stock. c. Treasury stock is the same as preferred stock. d. Treasury stock is considered to be outstanding stock. 2. The account least likely to be a stockholders' equity account is: a. Preferred stock b. Common stock c. Treasury stock d. Mortgage payable 3. ABC Company has a stock option plan as part of its compensation agreement. Assume that John, an employee, is in the stock option plan. He entered the stock option plan on September 1, 2016 and will be able to exercise the stock options on September 1, 2019. The type of stock involved is common stock. The exercise price is $50 and he is granted 5,000 stock options. The market price on September 1, 2019 is $75. Assume that John exercises the stock options on September 1, 2019. He will: a. Pay $0 each for 5,000 shares b. Pay $25 each for 5,000 shares c. Pay $75 each for 5,000 shares d. Pay $50 each for 5,000 shares

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