Which one of the following statements is not true?
A) Treasury stock transactions do not result in gains or losses on the income statement.
B) The treasury stock account is treated as a contro-stockholders' equity account
C) The total amount of stockholders' equity is unaffected by the method used to account for treasury stock.
D) Treasury stock transactions may result in an increase to retained earnings.

Question

Quizplus · Accepted Answer

Treasury stock transactions may result in a decrease to retained earnings, not an increase. When treasury stock is purchased for more than its cost, retained earnings decrease. When it is sold for more than cost, retained earnings increase.

Which One of the Following Statements Is Not True