When treasury stock is purchased with cash, what is the impact on the balance sheet equation?

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When treasury stock is purchased with cash, what is the impact on the balance sheet equation?

a. No change: the reduction of the asset cash is offset with the addition of the asset treasury stock.
b. Assets decrease and stockholders’ equity increases.
c. Assets increase and stockholders’ equity decreases.
d. Assets decrease and stockholders’ equity decreases.

Answer: d. Assets decrease and stockholders’ equity decreases.

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