Which of the following is a false statement regarding the cost method versus legal (par/stated value) method when accounting for treasury stock transactions? The timing of the gains or losses recognized on transactions will be different under each method. Gains or losses from treasury stock transactions affect retained earnings under the legal method. Treasury shares are recorded at their reacquisition price under the cost method. The gain or loss from treasury stock transactions is a direct adjustment to stockholders' equity under the cost method.