When a Corporation Declares a Small Stock Dividend, Which of the Following

question 2

Multiple Choice

When a corporation declares a small stock dividend, which of the following is false?

• A) Cash decreases.
• B) Total stockholders' equity remains the same.
• C) The capital stock accounts increase.
• D) Retained earnings decreases.

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Definitions:

Budgeted Sales

Projected sales figures that are estimated by a business for a future accounting period, used for planning and strategic purposes.

Operating Income

A measure of a company's profitability that excludes non-operating income and expenses, focusing on core business activities.

Fixed Costs

Expenses that remain constant regardless of the business's production or sales activity, including insurance and lease payments.

Variable Cost

Expenses that vary directly with the production output, including costs of raw materials and direct labor.