Treasury stock is a contra-equity account because treasury stock increases total stockholders' equity.Treasury stock is a contra-equity account because treasury stock decreases total stockholders' equity.

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Treasury stock is a contra-equity account because it decreases total stockholders' equity. This is because treasury stock represents the company's own stock that has been bought back and is no longer outstanding, therefore reducing the number of shares and the ownership percentage of the remaining shareholders.

Treasury Stock Is a Contra-Equity Account Because Treasury Stock Increases