Treasury stock is generally accounted for by the

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Quizplus · Accepted Answer

Treasury stock is generally accounted for by the cost method, which records it at its cost of acquisition on the balance sheet. This means that any subsequent increase or decrease in the value of the shares is not reflected in the company's financial statements, unless the stock is sold back to the market. The market value method would require the company to constantly adjust the value of its treasury stock on the balance sheet, which would be impractical and potentially volatile. The par value and stated value methods are not relevant to treasury stock accounting.

Treasury Stock Is Generally Accounted for by the