Under the cost method Treasury Stock is debited at the price paid to reacquire the shares and the same amount is credited to Treasury Stock when the shares are sold.

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sharrah rizano · Accepted Answer

Final Answer : True, Explanation :  This statement is true. Under the cost method of accounting for treasury stock, the shares are initially recorded at their cost on the balance sheet as a contra equity account. When the shares are sold or retired, the treasury stock account is credited at the cost amount and any difference between the cost and the selling price is recorded as a gain or loss on the income statement.

Under the cost method Treasury Stock is debited at the price paid to reacquire the shares and the same amount is credited to Treasury Stock when the shares are sold.

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