Assuming the Issuing Company Has Only One Class of Stock

question 21

Multiple Choice

Assuming the issuing company has only one class of stock, a transfer from retained earnings to capital stock equal to the market value of the shares issued is ordinarily a characteristic of

• A) Either a stock dividend or a stock split
• B) Neither a stock dividend nor a stock split
• C) A stock split but not a stock dividend
• D) A stock dividend but not a stock split

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Definitions:

Bank

A financial institution licensed to receive deposits and make loans.

Interest Earned

The income received from lending funds or depositing money into interest-bearing accounts.

Invested

To have allocated resources, such as money, toward something with the expectation of generating income or profit.

Deposited

The act of placing money or another form of value into an account.