What effect does a stock dividend have on the financial statements of the company that pays the dividend?
A. The current market value of the stock "paid" as the dividend must be transferred from the Retained earnings account to the Common stock account and the Additional paid-in capital account.
B. The par value of the stock"paid" as the dividend must be transferred from the Retained earnings account to the Common stock account and the Additional paid-in capital account.
C. No entry is made on the financial statements, because stock dividends do not affect the firm's market value.
D. The retained earnings account will increase and the balance in the Cash account will decrease by the market value of the stock "paid" as the dividend.
E. The amount in the Common stock account will increase, but the number of common shares outstanding will not change.
Answer: A
You might also like to view...
To form the present tense of most verbs, use the verb in its original form for all persons except the third-person singular. In the third-person singular, add s to the verb
Indicate whether the statement is true or false
Murray Products sells 2,100 kayaks per year at a price of $450 per unit
Murray sells in a highly competitive market and uses target pricing. The company has $990,000 of assets and the shareholders wish to make a profit of 17% on assets. Fixed costs are $450,000 per year and cannot be reduced. Assume all products produced are sold. What are the target variable costs? A) $132,040 B) $990,000 C) $776,700 D) $326,700
A follow-up is considered a reactive approach to speed up an overdue shipment
a. True b. False Indicate whether the statement is true or false
All of the following are major issues to be considered with respect to e-commerce contract issues except _____
a. parity between electronic and paper records b. enforceability of shrinkwrap, clickwrap, and boxtop agreements and licenses c. attribution procedures d. digital signatures e. location of the supplier's facility in relationship to the buyer's location