Treasury Stock

Treasury stock is capital stock which can be either common stock or preferred stocks that has been issued and reacquired by the issuing company but not been sold in the market or retired.

WHY A COMPANY PURCHASE ITS OWN STOCKS???

There are several reasons behind the own stock purchase. Some of them are given below:

• Distribute stocks to the emplyees.
• Maintain favorable market for the company's stock.
• Increase the company's EPS.
• Purchase companies through shares.
• To prevent hostile takeover.

Depreciation

Depreciation: 

It is a method of allocating cost of a tangible asset over its useful life.

Tangible assets e.g. Buildings, Vehicle,inventory,computer, supplies,microwave oven, telephones, refregerator etc.

Useful life means the duration of its usefulness. For example a computer can be used for five years. Then its useful life is 5 years.