A Small Stock Dividend

question 44

Multiple Choice

A small stock dividend:

• A)Results in a transfer of retained earnings to common stock and additional paid-in capital.
• B)Increases the number of shares outstanding and involves a pro rata reduction in the par value per share.
• C)Is accounted for in exactly the same manner as a stock split.
• D)Results in a transfer of retained earnings to additional paid-in capital and also increases the number of shares outstanding and involves a pro rata reduction in the par value per share.

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Definitions:

Direct Examination

The initial questioning of a witness by the party who called the witness to testify, primarily used to present evidence in court.

Breach of Contract

The failure of a party to fulfill the terms as agreed in a contract, which can lead to legal consequences.

Arbitration

A form of alternative dispute resolution where a neutral third party makes a binding decision to resolve a dispute outside of court.

Supreme Court

The highest judicial court in a country or state, typically having the ultimate authority in interpreting laws and the constitution.