Answer (D) is correct . Treasury stock is a corporation’s own stock that has been reacquired but not retired. In the balance sheet, treasury stock recorded at cost is subtracted from the total of the capital stock balances, additional paid-in capital, retained earnings, and accumulated other comprehensive income.
Answer (A) is incorrect because Treasury stock is not an asset. A corporation cannot own itself.
Answer (B) is incorrect because Treasury stock accounted for at cost is subtracted from the total of the other equity accounts.
Answer (C) is incorrect because Treasury stock accounted for at cost is subtracted from the total of the other equity accounts.
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