A Stock Split

question 40

Multiple Choice

A stock split:

• A) is treated by accountants just like a stock dividend.
• B) reduces the retained earnings account.
• C) does not change the amount in the common stock account.
• D) increases shareholder wealth.

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Definitions:

Credit Decreases

In accounting, actions that decrease liabilities or increase assets, typically reflected in the credits column of a ledger.

Account

A record that summarizes financial transactions of a specific type, such as revenue, expenses, assets, or liabilities.

Credit

An accounting entry that increases a liability or equity account, or decreases an asset or expense account.

Increased

A term indicating that a numerical value, quantity, or financial metric has gone up from a previous measurement.