A company never records gains or losses on transactions involving its own treasury stock.

Question

Quizplus · Accepted Answer

This is true. When a company purchases its own shares of stock, it is considered treasury stock. The company does not record gains or losses on transactions involving its own treasury stock because it is not considered an asset or liability of the company. Instead, the cost of the treasury stock is deducted from the company's equity. If the company reissues or resells the treasury stock in the future, any gain or loss would then be recorded.

A Company Never Records Gains or Losses on Transactions Involving