Question Details

Stock dividends and stock splits




1.	Common Stock Dividends Distributable is classified as a(n)
a.	asset account.
b.	stockholders' equity account.
c.	expense account.
d.	liability account.



	2.	The effect of a stock dividend is to
a.	decrease total assets and stockholders' equity.
b.	change the composition of stockholders' equity.
c.	decrease total assets and total liabilities.
d.	increase the book value per share of common stock.


3.	If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is
a.	Common Stock Dividends Distributable.
b.	Common Stock.
c.	Paid-in Capital in Excess of Par.
d.	Retained Earnings.



	4.	Which one of the following events would not require a formal journal entry on a corporation's books?
a.	2 for 1 stock split
b.	100% stock dividend
c.	2% stock dividend
d.	$1 per share cash dividend


	5.	Stock dividends and stock splits have the following effects on retained earnings:
	Stock Splits	Stock Dividends
a.	Increase	No change
b.	No change	Decrease
c.	Decrease	Decrease
d.	No change	No change






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